January 2, 2024
The latest research, market indicators and trade summaries from Sungarden Investment Publishing
ROAR Score
(Return Opportunity and Risk)
If my choices are stocks and cash, what % would I have in the stock market right now?
ASK ME ANYTHING: an ETFYourself live event
Tuesday, January 9, 2024 at 5:00pm ET
Agenda:
Rob walks you through the latest newsletter and market views, live!
Introduction of several new features to the ETFYourself.com site
Your questions…about anything…answered
Registration Link HERE
Market in a Minute
So much for what I had in my head to write in this space as of a few days ago.
Here we are, one trading day into the new year, and it just happens to be the time of the week where I attempt to make sense of markets for ETFYourself.com readers, the stock and bond markets flip on their heads versus what we have seen since late October, when both rallied like it was a race to the finish line. Because it was.
I am likely among the minority of investment strategists who try to tune out the “annual performance contest” whereby so many opinions are based on what happened “this year” or “last year.” This is not investing, it is gamifying something that can make or break your financial well-being. When I had a client base (27 years, now retired since we sold the firm 3 years ago), one of the toughest conversations was the “how did we do last year” discussion that inevitably came up. It is human nature, so I get it.
I wrote an article a zillion years ago explaining that investing was more like a pro baseball season than a pro football season. In the latter, every game counts so much since there are only 17 of them. Baseball has 162 games, so to overreact to one in May or July is silly. Yet investors insist on following the calendar…because big Wall Street has convinced them to! Don’t fall for it. Here’s why:
This shows 1-year “rolling” returns of SPY since its 1993 inception, with each point on the chart being a 1-year period at the end of a calendar quarter. So every March-March, June-June, etc. One thing we can say about this chart is that it looks more like an EKG than a smooth line (oh, and EKG is a ticker symbol for a tiny digital health ETF, which is not what I’m referring to here).
So the first “pro tip” of 2024 is to not get drawn into the misguided, traditional narrative. Nine months ago, SPY’s 1-year trailing return was -8%. One quarter later, it was 19%. What I look at is not the annual returns, but ALL 1-year periods. That’s the investing equivalent of looking both ways before you cross the street. Firms that live and breath on maintaining and growth assets will gladly point to 2023’s SPY return (26%) in hopes you don’t remember 2022’s (-18%).
The last 2 weeks have seen a record jump in subscriptions (free and paid) for us. So, to paraphrase a song (Sing Together) from our favorite band, Train, “if you knew us from the very start (3 months ago), or we met last week at the grocery mart (new subscribers),” thank you for being with us.
2024 is OUR year: you and us, navigating these markets, learning and creating a true community of serious investors that prefer not to be harassed by the classic newsletter snake oil salespeople and hype machines.
The plan:
Our ROAR Score stays at 35, where it moved up to four weeks ago from 25. Our 2-ETF model portfolio is 35% in SPY (S&P 500) and 65% in BIL (1-3 month T-bills).
That portfolio, which has a chunk of my savings in it (as do all of our models), was up 6.7% in 2023 and in its first 2 years, outperformed a 60/40 ETF (symbol AOR) by about 12% in total. And while it is a small sample size, the 1-year returns have ranged from 9.5% to -2.2%. Whether it is one of our models or any investment where performance is being tracked, that is a more meaningful observation about “how it did” than defaulting to the calendar.
Important reminder: the ROAR Score is “broadcast” here every Tuesday night, but I can and will change it any time between Tuesday newsletters, and send an interim alert. We’ve done that once so far in our first 3 months.
ETFYourself.com is new, but the investment process behind it has evolved over the past 3 decades. You bring the desire, we'll provide the tools!
S&P X-Ray
The S&P X-Ray tracks our latest projected trading ranges
for the S&P 500
(Updated weekly on Tuesday, as of Monday’s market close)
