WealthProtect Status Update: April 2021

This is the monthly WealthProtect System* status update, where we include probability (Low, Mid, High) of a change in status within the next two months. We also include a commentary on actions taken this month, changes in overall asset allocation, and on the market in general.

System Commentary

No changes to the system.

Economic/Market Commentary

Continued re-opening of the economy and stimulus spending should be bullish for equity markets in the short run. In the intermediate run, the month of May begins the typically less favorable May-October timeframe in the US stock market. Of course, this type of “seasonality” in the markets which seems true averaged over many years, may not apply in any given year. From a longer-term perspective, markets continue to look frothy. For example, margin debt (money borrowed from a stock portfolio to buy more stocks) is at an all time high again. Since investors can be forced by the broker/dealers that loaned them the money to sell in a decline, margin debt during a market crash can be like adding gasoline to a fire. It doesn’t mean it will happen; just be aware of the risk. Call us if you have questions.

Thanks for your continued trust.