There are weeks it’s difficult to read what the market is telling us. There are usually variables all over the place, with some tilting the narrative to a bullish spin while others force us to be more cautious. There is usually difficulty synthesizing the data and determining what, if anything, we should be doing in the market at any given time.
There is not that difficulty today.
The great light of clarity has obliterated the cloud of the uncertainty of the election, and both parties, not just one, were at least awarded with a quick ending and a direction for the country going forward.
The stock market appears to very much like that direction. We don’t see market days like this typically. It’s as unequivocal a response as it gets. As of the writing of this, at the market close this Wednesday, post-election, the Dow Jones Industrial Average closed 3.5% up or 1,474 up, a massive day by any measure1. The S&P 500 rose 2.5% The Nasdaq was up 2.9%. The Russell 2000 was up 5.8%.
Whether your side won or not, and for whichever reason a 1:30 a.m. glass of wine was possibly in hand, an acknowledgement almost has to be made that the market liked the results of the election. So many of our clients have told us that they are holding fast, waiting on the outcome of the election before they decided to take on market risk that could potentially better offset inflation, for example (the kind that actually exists, not what they actually report). That wait is over.
Now timing always matters but market timers we are not. Everybody clear? Great! What it means is that market valuation (which is high) does matter but in the end it’s still about time in the market. And you need the market, because the biggest beast we have to help you beat inflation is snorting loudly and stamping confidently right in front of you and is making his presence felt. It kind of looks like a bull …
We don’t need tea leaves today. We need you to give us a call and set a meeting and let’s at least talk about having a reset of your risk tolerance. If in the end, you don’t wish to take more risk, we are not demanding you take more risk. But don’t say we didn’t put out the all-call.
Because this is it.
Sincerely,
The WTA Investment Committee
Sources:
1Cnbc.com; https://www.cnbc.com/2024/11/05/stock-market-today-live-updates.html
