From the desk of Vance Howard:
The market has been trading in a sideways pattern for the last three weeks, with no real direction either way. However, the overarching trend is still clearly down, and the markets look to be ready for a re-test of the lows set in September. Cash is king at this stage of the cycle, and we are sitting on a lot of it. Patience will pay off. This bear market will end; we just can’t be sure of when. The bond market is having the worst performance it has had in over 40 years. A lot of investors thought government bonds were safe. Well, they are safe if you hold them to maturity, but if you own 20-year treasuries you are down almost 34%, and it looks like they have even further to fall. We have very few bonds in our holdings, and the ones we do own are 1-month treasuries which are basically a notch above cash.
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