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We’ve Said it Before, and We’ll Say it Again… the Market is Merely a Reflection of Ourselves: Market Commentary from Cabana’s CEO – March 8, 2022

2 years ago

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War rages on in Ukraine with daily reminders to the rest of the world that war equals horror and death. In my life of more than 50 years, there have been a handful of occasions when it hit home just how real and bad war is. Most of the other times, lucky people like me just watched from a distance – removed from the suffering and pain. This current war hits home for me, and a lot of others I suspect, because this war could bring about the end. The end of everything. Those innocent people dying in Ukraine may just be the beginning. This time, mistakes and arrogance could be fatal to mankind. Russia has nuclear weapons. Lots of them. An injured animal is a very dangerous thing and the only way out it appears is to badly injure the animal. That scares me.  

I have said many times here that the stock market is merely a reflection of ourselves. Today is no different. The stock market is scared too. In the past week, selling has intensified with the Nasdaq now in a confirmed bear market (down more than 20% from its highs) and the S&P 500 now in a formal correction (down 12% in the past sixty days). The western world’s reliance on Russian energy has come home to roost in a very ugly way. Oil is now at $120 a barrel, causing gas prices to approach record highs of more than $4 a gallon in the United States. It is worse in Europe. And it seems there is nothing we can do about it. If the U.S. and NATO press forward with sanctions on Russian oil, the problem likely compounds. Saudi Arabia, Iran and the rest of OPEC are unlikely to step up and fill the void. The fact of the matter is that the United States suffers with oil at $150 a barrel. People cannot afford to pay $5 or $6 a gallon for gasoline without reducing spending elsewhere. If that is the price demand and history repeats itself, we will likely enter a recession.  

So, here we stand as the leader of the free world, stuck between the prospects of solving the most dangerous conflict of the past 40 years by economically decapitating a country that we have come to rely upon, and in doing so, cause great pain to ourselves and others across the globe… or alternatively stand on the sidelines and watch the inevitable grind of human lives and a democratic country lost. We may posture and attempt a balance, but I am afraid that is all it is. At some point a choice must be made – and don’t forget the part about an injured animal.  

My prayers are for wisdom and grace to be bestowed on those in positions of power and who must make decisions right now. I do not envy them. 

Disclaimers

January 17, 2024

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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.  

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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