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Advisor Workshop Recap and Potential Signs of a New Bull Market Cycle: Market Commentary from Cabana’s CEO – August 17, 2022

2 years ago

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I would like to spend a few minutes today thanking the entire Cabana team as well as our advisor partners who visited Dallas last week from all over the country for our first ever Cabana Advisor Workshop. What a great week! We discussed the unique economic conditions we’ve seen this year, how it has impacted the world (and all of us at Cabana), some algorithm adjustments we are looking into as a result, and we workshopped and brainstormed new ideas and services that I believe will be a big part of what we do in 2023. Cabana’s relationship with CI Financial has given us access to a robust suite of family office services that I think will benefit our clients as well as our partners who want bespoke products like tax preparation and planning, trust and estate planning, bill pay, financial planning and other related solutions. These expanded offerings will eventually sit alongside our already-existing 401k solutions, asset management, trading, reporting, as well as education and marketing. Finally (and apologies to our clients – this is only relevant to advisor partners at this time), kudos to Georgia and Slate who have put together a resource library available to all our partners who want information and collateral on any subject we have touched on over the years. Lots more to come on all of this this over the next few months, so stay tuned! 

Now, on to the markets. Equity markets have continued to move forward in what is now a sustained rally from the late June lows. All major indices are now testing their respective 200-day moving averages. This important level is likely to provide some resistance to prices moving higher. Stocks have become overbought and are due for rest or pullback as investors assess how far we have come and whether this has been a powerful bear market rally doomed to fail, or the beginnings of a new bull cycle. The first clue that I am looking for is whether the S&P 500 can reclaim its 200-day moving average on a weekly closing basis. That alone should cause the most bearish of investors some pause and is likely to lead to another leg up leading into the next Fed meeting. We will remain patient and take it one day at a time. This has by all accounts been an extraordinary year and nothing should be taken for granted.

Disclaimers

January 17, 2024

This material is prepared by Cabana LLC, dba Cabana Asset Management and/or its affiliates (together “Cabana”) for informational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. This material may only be distributed in its original format and may not be altered or reproduced without the prior written consent of Cabana. The opinions expressed reflect the judgement of the author, are as of the date of its publication and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Cabana to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Cabana, its officers, employees or agents.  

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Commonly used index/benchmark definitions:  

All indices and categories are unmanaged and an individual cannot invest directly in an index or category. Index returns do not include fees or expenses. Benchmark indices will likely materially differ from Cabana’s portfolio strategies. Detailed information as to how the returns are calculated can be obtained online from the following link: https://thecabanagroup.com/disclaimers/performance-reporting-methodology/. 

Morningstar’s Moderate Target Risk index  follows a moderate equity risk preference and is based on well-established asset allocation methodology from Ibbotson Associates, a Morningstar company.  

Morningstar’s Tactical Allocation category includes portfolios that seek to provide capital appreciation and income by actively shifting allocations across investments. These portfolios have material shifts across equity regions, and bond sectors on a frequent basis. 

The S&P 500 Index is a market-capitalization weighted stock market index of 500 widely held large-cap stocks often used as a proxy for the U.S. stock market.  

The Russell 2000 and 3000 indices are market-capitalization weighted stock market indices that include, respectively, 2000 and 3000 of the most widely-held stocks and are often used as proxies for the U.S. stock market. 

The Nasdaq Composite Index is a market-weight capitalization index that covers more than 3,000 stocks listed on the Nasdaq Stock Market. What is the Nasdaq Composite, and What Companies are in It? | Nasdaq