We pick the mix of investments that maximizes the expected returns while not exceeding a fixed maximum risk. In the past month, we have, once again, made a little bit of money in bonds and the money market.
I’ve written in the past two newsletters that the recent increase in stock prices is not a true rally. That conclusion, though unpopular with some, still holds. While stocks have gone up recently, they are still in a definite downtrend.
The prematurity of a bull market claim is easy to see. The so-called rally puts stocks back to where they were in January or February. All three stock funds are still down by about 40% in a single year, even with this price increase. This could be a bottom, but so far, there is no evidence that it is. Stocks made a similar attempt at a bottom in December and January, and it failed.
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