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PCM Report September 2013: Law of Diminishing Returns


The passing of Labor Day means Wall Street returns to work which has not always been a positive event in the past (September is statistically the worst performing month over the last 40 years). While the current market trend remains up, our caution antennas are equally up and we believe volatility is going to be high.

With the exception of banks, earnings have been falling, causing market valuations to climb. The risks of military action in Syria is not being priced into the market. Neither is a debt ceiling standoff that may occur in October as the Treasury loses its ability to pay the government’s bills.

Of course all these and other problems could be averted and allowing the market to achieve new highs.

This month we look at the decreasing effectiveness of the Fed’s policies and consider the possibility that time is running out on riding the wave of Central Bank manipulation of asset prices. Our bent towards managing risk will be evident but we continue to operate our models based on real time market results, not expectations. Our expectations, however, will cause us to be quick to implement measures to protect against the next significant correction in the markets.

Hope you find the analysis helpful and informative.

Brian Lockhart, CFP
Chief Investment Officer

Follow this link to view: http://www.peakcapitalmgt.net/files/September%202013%20PCM%20Report.pdf


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