Market Pulse: The end is here |

Market Pulse: The end is here

David Vomund / Special to the Tribune
David Vomund

Of the political campaign, that is. And good thing, too. No more attack commercials. No more political texts. That’s good for our sanity … and good for the market, too.     

Appearing on Fox Business, Ken Fisher, a long-time Forbes columnist and money manager with more than $100 billion in assets, said that since 1946 the market has rallied after the mid-term elections when measured from the fourth quarter through the first two quarters of the following year. No exceptions, and from that three-quarter base the gains were large. Going back 100 years that was true except for the mid-terms ahead of the Great Depression and World War II.  

Fisher explained that since the president’s party almost always loses congressional seats in the mid-terms nothing of any consequence happens in the next two years. So without political risk, investors will be free to focus on earnings, interest rates and the economy, the threesome that matters most. Unlike the media, investors will see a glass half full as headwinds from inflation, rising interest rates, and a weakening global economy — all well-known negatives — ease or reverse.  

We can already see an improving market. Last month was the best October for the Dow Industrials since the mid-1970s, that despite the collapse of its big-cap technology stocks (Apple, Intel, Cisco, Microsoft, Salesforce). One reason is that earnings reports show that large old-line names are better positioned than tech companies to pass along rising costs. It’s a good time to own your parent’s (or grandparent’s) favorite stocks.

My focus has been on lower-risk stocks. Among those are energy (Kinder Morgan, Williams Cos., Exxon Mobil), healthcare (Merck, Amgen, Pfizer) and financials (Bank of America). As a group they have done far better than risk-on stocks (technology, low-yielding stocks) and they will. Capital is flowing out of technology now and into dividend growers as investors trade far-distant potential profits for real near-term gains and income. Some is also going into money-market funds and very short-term bonds, yields on which are becoming increasingly attractive.

The market is where it was five months ago. That despite multiple rate hikes, hawkish Fed speeches, bad inflation reports, lowered earnings forecasts, scary headlines, etc. Why? The market can’t keep going down day after day for the same reasons.  

One of Wall Street’s favorite sayings is that investors hate uncertainty. But as The Wall Street Journal says what they should hate is certainty. When everyone believes the market will fall then count on an upside surprise.

David Vomund is an Incline Village-based Independent Investment Advisor. Information is found at or by calling 775-832-8555. Clients hold the positions mentioned in this article. Past performance does not guarantee future results. Consult your financial advisor before purchasing any security.

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