At any given time there is always a debate about which way the stock market is about to move. It is important to consider both sides of the bull vs. bear debate in order to determine the best investment decisions for an individual’s specific needs and particular situation. HCR Wealth Advisors, a wealth management firm, has noted that despite the stock market being at record highs there are significant risks investors should be aware of when making decisions.
Positive signals from stock market
When the stock market achieves new highs, as it has been doing lately, this usually hints at positive trends in the economy for the near-term to intermediate-term. The S&P 500 Index reached new highs in the early part of May but then fell slightly and continued to consolidate for approximately 6 to 8 weeks. Then in early July the market achieved new highs again, suggesting future moves upward. However, it is important, as HCR Wealth Advisors suggests, to be agnostic in one’s analysis of the market conditions and not become carried away with overly emotional reactions of market moves.
Bearish hints from bond market
Despite the bullish signals from the stock market, the bond market is painting an entirely different picture of future market moves. Usually when bond investors are expecting continuing economic strength, one might expect increasing bond yields along with the Federal Reserve’s continued hawkish stance on interest rates. However, the markets are experiencing the opposite of this scenario. Yields for 10-year Treasury bonds have moved downwards from 3.20% to below 2.0% since last November. This is a large bearish move, particularly for non-recessionary conditions. Yields are now at the lowest levels since the last U.S. election cycle.
Personalized investment strategies from HCR Wealth Advisors
Given the uncertainty of future market movements one should be sure to practice proper risk management when making investment decisions. However, everybody’s situation is different with varying levels of risk tolerance. This is why HCR Wealth Advisors starts its investment process by obtaining a complete understanding of an individual client’s specific requirements and financial objectives.
This article is for informational purposes only and should not be considered investment advice. HCR Wealth Advisors is not affiliated with this website.