There is no glory in blazing a trail down the beaten path of macro-induced pessimism in the financial markets. The S&P was within spitting distance of a new all-time high on Thursday, before the elderly population of Great Britain decided that they wanted to set their skiff adrift in choppy waters at 2 a.m. after a night of drinking pints at the local pub. In other words, a trip into the unknown with completely random consequences in the time ahead.
The markets, of course, reacted because of the shock value of such an unexpected move. However, it is our choice at investors whether to believe the reaction or put it in the category of a temper tantrum due to being frightened by extraneous circumstances, yet again.
What you will have over the next few months are prophecies of cataclysm, brought about by a disintegration of the European Union, throwing the entire developed world into a state of fiscal and monetary retardation. What will most likely occur with the markets in response to the perception of impending doom will very likely be what we have experienced during the first half of 2016: A wide ranging sideways chop that is meant to confuse investors through a maligning influence.
The markets aren't going anywhere this summer. They may very well make a new high in the next few weeks. The S&P may move down to 1900-1950 by late in the summer. However, amidst all the calls for termination of the financial system as we know it, the end result will be near nothing. The attraction to the 2000 level for the S&P should remain constant in the midst of the baboonery.
In time, the expansive sideways range we have been experiencing in the major averages should give way to a new leg up for this bull market. The entirety of my mission is to discover the most advantageous form of investment to gain alpha from this eventuality. I don't believe there is necessarily another worthwhile pursuit an investor should be focused on, lest they enjoy dwelling in consensus opinion and investment, which unsurprisingly, remains uninspiring in its creativity.
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