There are several market myths related to certain market indicators which have the tendency to distract investors from what really matters in assessing market opportunities. We believe the overall fundamental backdrop is currently quite positive thanks to solid economic growth and strong corporate earnings trends, while market sentiment and technicals continue to suggest future equity strength. This week we will bust some common market myths.

Myth 1: The Yield Curve

The yield curve has flattened throughout 2018, causing some to fear that a recession may be right around the corner. This makes sense, as the past nine recessions

Beige Book Suggests Continued Moderate Economic Growth

The latest edition of the Federal Reserve’s (Fed) Beige Book, released Wednesday, April 18, 2018, sustained a positive view of the U.S. economy. The Beige Book is a qualitative assessment of the domestic economy and each of the 12 Fed districts individually. The report is prepared eight times per year, ahead of each Federal Open Market Committee (FOMC) meeting — the next of which is set to take place May 1 – 2, 2018. We believe the Beige Book is best interpreted by measuring how key words change over time. The qualitative inputs for the April 2018 Beige Book were coll

After a substantive increase in the first months of 2018, real yields have slowly declined, a positive indicator for stock and bond markets, as they suggest lower true cost of debt for domestic companies. A bond yielding 4%, with inflation at 2%, has a real (inflation-adjusted) yield of 2%. Real yields can be seen as compensation investors receive for higher future growth rates, inflation volatility, and a potentially more active Federal Reserve (Fed). Indications of higher levels of growth and inflation, and thus a more aggressive Fed tightening schedule, led to a sharp rise in real yields in early 2018, which may have contributed to equity

The February 2018 market correction caught many investors off guard, but the longer-term trend remains higher. This year has provided more volatility than we’ve seen in recent years, with many wondering if the movement is a sign that the bull market is ending. Remember that when the market is finding its lowest point (the bottom), the process to get there can be quite frustrating and even confusing for investors. As a result, we acknowledge we are amidst the bottoming process, and we don’t think the bull market is ending, as longer-term technicals continue to look strong, along with sentiment flashing levels of worry seen at other