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Bump In The (Silk) Road?

Terence Reilly profile picture
Terence Reilly

With each passing day, week and month, we are more in awe of this market. It just keeps plugging along higher and higher. There is no predicting when the momentum will shift so we continue to be invested but just a little less so. The winning strategy is to recalibrate our investing, downshifting in our risk while seeking better risk adjusted returns. It is not our job to prognosticate but to keep an eye on what could upset the apple cart and how to profit from it. Our latest worry is China. China has just completed its most recent 5-Year Congress. Every 5 years the leaders in China get together to elect leadership and formulate the next 5-year plan. Xi Jinping continues to consolidate his power and his grip on one of the great economic engines on the planet. Leading into the congress, the leadership there chose stability over change. Now that the congress is over, Xi can get back to work. We are looking at China to see if, now that leadership has another 5 years in charge, change is about to come to China. Will China now try to reel in shadow lending in the country and its rampant real estate market? Will they allow a more rapid depreciation in the Yuan? If change comes to China, it will reach our shores soon enough as the economic ripples will be felt worldwide.

From Cashin's comments this week comes some interesting facts cited by the sharp eyed Bob Pisani from CNBC:

Technology is so strong this month that it accounts for 75% of the gain in the S&P 500, according to Standard & Poors. Without Tech, the S&P would only be up roughly 0.5%. It's worse than that: five stocks are most of the gain. Big tech this month Facebook up 15.5% Amazon up 12.5% Apple up 8.2% Google up 6.1% Microsoft

This article was written by

Terence Reilly profile picture
Former Member of the NYSE, currently a Registered Investment Advisor, concentrating on developing long term investing portfolios for High Net Worth investors and families.

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