Stock Talk - The Votes are In: Are We Still in a Bull Market?

Starting point is 00:00:00 Okay, investors, this was written on Sunday, November 3rd, and it was filmed Monday morning the 4th, pre-presidential election, which was Tuesday the 5th. Hopefully, by this time when it hits YouTube on Friday, November 8th, we have an undisputed president-elect. Last week, I did a thought piece on potential stock market outcomes if Donald Trump were re-elected. This was not a prediction or an endorsement, but I did it, given there were so many similarities in interest rates, volatility markets, and public media outlets, now and to 2016 when Donald Trump was a surprise winner. Okay, investors, we're in a bull market. And until otherwise proven false, or until we hit a black swan event, we should continue on this bull market path.

Starting point is 00:00:43 The economy is growing between 2% and 4% in real terms. Inflation rates have dropped back between 2 and 3%. Historically, this is the definition of Goldilocks in the stock markets. And historically, these are the data points achieved in bull markets. Not too hot, not too cold, but just right. Take a look at the same table we presented last week with returns under a party sweeping the presidency, House, and Senate over the next two years. Contrary to most people's thinking, historically, sweeps have not been disasters for the market. In fact, GOP sweeps have been

Starting point is 00:01:14 slightly more favorable than Democratic ones. And over a four-year presidency, the best average annual returns have actually come under a Democratic president and a GOP-controlled Senate. Take a look at the four-year annual return data as compiled by Fidelity. No guarantees, of course, in past performance is not a guarantee of future result, but that has been the data over decades. Okay, but Chris, this time it's different. Folks, I've heard that one every year for six years at Oak Carbister Group and X the COVID collapse. It really hasn't been different than this time. Yes, the excuses are different after the fact, but the outcomes have been extraordinary good.

Starting point is 00:01:50 So many might say, hey, the best is behind us. I recall hearing that in October of 2022 and then again in October 2023, right near the lows. History says don't bet against this market going higher only because we're up around 20% year to date. Why? Because the good times usually trend in the economy and in the markets. Strong first half stock returns usually lead to strong finishes. The takeaway from this chart was that regardless of who wins the election or who won this week, the economy is doing okay, and the strong rally in equities in the first half usually leads to higher returns than normal in the second half of the year.

Starting point is 00:02:27 And yes, no one wants to hear that a self-reliance. off in late July caused by the Japanese yen carry trade and wine was likely the best opportunity to add to their longs before year end, but given how volatility spiked back then, it shouldn't be that surprising. Take a look at Charlie Beello's data, which shows the best returns for the S&P 500 during the first 202 trading days of the year and what happened through the end of the year. He's always got great stats. This data goes all the way back to the depression.

Starting point is 00:02:58 As you see, it's very rare to have a damn. down return in the fourth quarter after a strong first nine months. In fact, only two times out of 19 years shown have returns been over 19% for the first three quarters and then had a down fourth quarter. Those years, 1943 and 1983. Investors, regardless of who won last Tuesday or wins if we're still counting votes today, history says your money, if invested in the U.S. stock market index, the S&P 500 should be treated very well through at least the inaugural ball next year in January 2025. We're just now entering the seasonally strongest three-month period for stocks, and historically markets top in December or January most often, as shown in another great

Starting point is 00:03:41 chart from 314 research. I don't know who won the election as of this filming, but when I step back and rationally think about the two highest likelihood outcomes, while our candidates might not have won, or investment dollars, if invested in the U.S. equity markets, are likely to continue to be very well, rewarded into late January of next year at the earliest. It's been a secular bull market since around 2011 and a cyclical bull market since the cyclical lows in October of 2022, pivot higher after the first half of 2022 cyclical bear market. And it's a bull market until it proves itself it isn't, regardless of whether your candidate won this week or not. And investors, as Martha Stewart says, at least for investors, now that's a good thing. If you're uncomfortable with a white

Starting point is 00:04:28 range of possible equity outcomes, the Oak Carvis team has launched a new strategy that retains the ability to go along stocks, short stocks, as well as buy partial hedges and a shock absorber for your stock portfolio. You can find information on this new strategy of ours at oakhervisfonds.com. For myself, from Charles, James, the rest of the investment team, and from everyone here at Oak Carvis, have a blessed weekend.

Stock Talk - The Votes are In: Are We Still in a Bull Market?

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