Updated: Apr 13, 2019
March 2019 Investment Outlook
The U.S. Stock Market remains overvalued. Our opinion has not changed since our last recommendation in December 2018. In November the Shiller P/E and Crestmont Research is at 31.8 still higher than the 2008 crash P/E ratio of 27.0.
The Treasury Yield Curve is flat but may go inverse over the next year, which may signal a slowing economy over the next 24 months. The possible slowing of our economy may start as tariffs against our international trading partners begin to take effect — for example, the recent floods and lower demand from China on wheat and soy production has force Federal government to increase subsidies to farmer
Our Poor Man’s Guide to Market Assessment created by Howard Marks, Chairman of Oaktree Capital Management does indicate that investors need to hold on to their wallets. Poor Man’s Guide is at plus 16 which means a high level of risk and volatility.
Our longer-term market metrics contains a high level of risk. The continued volatility and several of the market indicators point to an elevated level of risk--combined with the ongoing trade war policy--suggest that volatility may get worse.
Our portfolio allocation for over 50-year-old is: (this has not changed since September 2018)
25% cash 50% U.S. Short-term Treasury Bills, less than 5-year duration 25% Stocks