Since MarketWatch recognized Kirk as the "World's Next Great Investing" columnist, he has provided financial and economic analysis to readers around the world. His investment approach effectively blends finding value in the biggest growth trends, while using volatility to find opportunity.
With twenty-five years of financial industry experience, he has seen first hand how brokers, bankers and investment managers have taken without giving much back. With that in mind, Kirk has developed Fundamental Trends to help you replace your high-priced financial adviser and take control of your financial future without having to go it alone.
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Welcome. The content below is free to the public. It might be worth what you are paying for it. Having been around and in the financial industry since 1989, I have learned that only one thing is certain and that is almost nothing is certain. As we endeavor to come up with our best analysis of the world around us, we have to try to overcome a myriad of issues including our own ignorance, biases and emotions. What follows are my attempts to overcome those obstacles.
I know most of you know about the Super Bowl market predictor. Basically, if an old AFL team wins the Super Bowl, the stock market falls. If an old NFL team wins, that's good for the stock market. I don't really want to get into that even if it's been like 80% accurate. What I know is that there are multiple reasons that the stock market should continue to correct despite the potentially soothing sounds of Janet Yellen this Wednesday and Thursday.
While Cam Newton might have a hard time understanding what happens when everybody on his team doesn't play well - including himself - the markets sure are starting to understand what happens when the world economy grows at a slower pace. Back in January I wrote an article for MarketWatch titled Markets Are Adjusting to "Slow Growth Forever" that described exactly what is going on in global markets. Here's the short of it:
Almost a year ago I started warning to carry more cash in your portfolio. In September I declared that "The Bear Market Has Begun." Finally, a few weeks ago, I explained that Markets Are Adjusting to "Slow Growth Forever."
In the past few months we have now seen a downturn that is officially a correction and threatening to become an outright bear market. I believe that the bear market is virtually guaranteed at this point. As I covered in my annual letter, excluding the largest companies, most of the various parts of the economy reached bear market territory in 2015. Given declining earnings estimates for the third consecutive quarter, it would be a surprise if mega-caps didn't join in the pain.
Some of the market darlings sport huge price to earnings ratios and with growth peaking even at those companies, it is unlikely they don't fall in sympathy. After a brief relief rally, we are once again seeing the downward trends in markets. What investors need to keep in mind, is that the bear market really has begun. Short of central bank intervention - which we'll get - there is very little hope of not completing the process. I expect the S&P 500 to reach about 1600 before reversing course upwards. It could of course get worse, but it would take a crisis event for that to happen.
The below chart takes advantage of something I learned in economics, that is, when approximating, use thick lines.
I only have a few minutes before I have to run, but I am watching this market action and it screams one thing to me - BE PATIENT!
I know everybody wants to "make a trade" and I do some of that, however, the majority of your money ought to be more patient. As I've recommended time and again the past year, hold 25% to 50% in cash equivalents. There are several huge buying opportunities developing. I covered some in my recent webcast "My Investment Approach."
Here are some of this week's important and interesting articles that I remembered to bookmark. I willfully acknowledge that quite a few of these I get from other people's "things to read" lists and from what gets tweeted at me. I try to pass on pieces without a firewall.
You'll notice a lot of articles that have charts. I like charts. It makes learning easier, but be careful, some charts are propaganda using biased data. Think things through in the context of a "slow growth forever" global economy that is anything but a free market and that is driven by social concerns, political ambitions, academic mistakes, monetary manipulation, fear and greed. Learn to be a chess player, and not just the flat board kind, the multi-dimensional, four level, more than two sides, animated characters with magic kind.
About the Publisher
Kirk Spano grew up in a middle class working family in Milwaukee. His parent's sacrificed to put him through Catholic Schools where he excelled. He went on to the University of Wisconsin in Milwaukee where he studied Economics and Political Science.
Mr. Spano spent over 12 years as a broker restrained by a financial industry that puts itself first. In 2010, he was able to make the break from that failing industry and opened Bluemound Asset Management, LLC, a fee-only Registered Investment Advisor in Wisconsin, designed to put clients first.
In 2011, Kirk was tabbed "The World's Next Great Investing Columnist" by MarketWatch of the Wall Street Journal network after beating out over 150 other analysts and writers from around he world. Since then, he has been syndicated extensively and made various media appearances.
Kirk opened Fundamental Trends in 2015 for those who have chosen to take control of their finances and manage their own money. Fundamental Trends goal is to help Main Street take back from Wall Street.