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Look Forward (Not Backward) When Investing

Astoria Portfolio Advisors appeared on CNBC (click here) earlier this week to discuss:

  1. Inflection point in macro-economic / earnings data (see below)

  2. How to strategically position ETF portfolios on a forward-looking basis

Moreover, we recently produced a blog (click here) where we talked about:

  1. Strong momentum

  2. Behavior of retail investors

  3. Exceptional liquidity provided by the Fed

  4. Election risk (which markets are currently ignoring)

Below are a few macro-economic indicators that Astoria is closely monitoring.

As you can see, 2020 earnings trends appear to have troughed.

Source: ETFAction

The most important takeaway from the below macro-economic charts is that several key indicators have stopped falling. Of course, we are nowhere near prior COVID-19 levels. However, stocks are forward-looking/long duration assets (arguably with no expiration as they don’t mature), so any marginal improvement (i.e. a positive rate of change), will lead to an improvement in risk asset sentiment. Coupled with the Fed anchoring rates near 0% and purchasing financial assets, it’s no surprise stocks are materially off the lows.

Data source for the above charts is FRED ST. LOUIS FED. Data accessed on June 19, 2020. Charts compiled by Nick Cerbone from Astoria Portfolio Advisors.

We will be releasing our Quarterly Investment Committee Insights in the coming weeks.

Best, Nick Cerbone

For full disclosure, please refer to our website: https://www.astoriaadvisors.com/disclaimer

Click here for Photo Source