Market Analysis For Mutual Fund Investors Michael Price Investors OnTrack, Inc. 850-934-6300 email@example.com An Overview
A Structured Approach to Market Analysis • Business Cycle • Breadth • Market Indexes • Global Trends • Sector Trends • Fund Selection • Hedging
Business Cycle • Is the growth rate of the economy increasing or decreasing? • Is the economy growing at, above, or below the rate that the Fed considers to be inflationary? • Is the Fed trying to slow or to stimulate the economy? • Are corporate profits likely to increase or decrease in the foreseeable future?
The Typical Business CycleAs Described by Martin Pring in the All-Season Investor • Stage I – Bond Prices Bottom • Bonds Bullish • Stocks Bearish • Commodities Bearish • Stage II – Stocks Bottom • Bonds Bullish • Stocks Bullish • Commodities Bearish • Stage III – Commodities Bottom • Bonds Bullish • Stocks Bullish • Commodities Bullish • Stage IV – Bond Prices Top • Bonds Bearish • Stocks Bullish • Commodities Bullish • Stage V – Stocks Top • Bonds Bearish • Stocks Bearish • Commodities Bullish • Stage VI – Commodities Top • Bonds Bearish • Stocks Bearish • Commodities Bearish The Economy Bond Prices Stock Prices Commodity Prices
Breadth • Is the current advance or decline narrow or broad? • What are the implications of very negative or very positive breadth? • What role does volume play? • Reference : The Complete Guide to Market Breadth Indicator by Gregory L. Morris.
Market Indexes • Are the major market indexes in agreement about the trend direction? • Does the market have a capitalization bias? • Does the market have a value – growth bias? • Relative strength comparisons.
Where’s the Money Going? • Market Watch List • Sector Watch List
Fund Selection • What funds are performing best in the current market environment? • What is the current environment? • How do I measure performance?
Portfolio Development • What does a plot of my portfolio look like? • How does it compare to market indexes? • What is my level of portfolio risk? • Should I be hedged in the current market environment?
Suggestions • Look at a LOT of charts. • Read a lot – looking for facts, not opinion, or at least fact-based opinion. • Draw on your experience, special knowledge and intuition. • Limit risk. • Have realistic expectations. • Value your own opinion, no one knows what tomorrow will bring.