30 Years Ago...

Monday, October 23, 2017 - The Dow Jones Industrial Average crossed the 23,000 mark for the first time this past Tuesday, about two months after an historical 22,000 milestone. The blue-chip index saw gains powered by UnitedHealth and Johnson & Johnson, both reporting higher than expected earnings. Another late week boost resulted from the Senate’s passing of a $4 trillion budget resolution, a major step forward for a monumental tax reform. The 51-49 vote sets the stage for a dramatic overhaul, cutting rates for corporations and diminishing trillions of dollars’ worth of tax-breaks, a priority from President Trump’s campaign. Even Bitcoin, which many believe to be a bubble on the verge exploding, rose to an all-time high of over $6,000.

This week calls for reflection. Most financial veterans recognize last Thursday as the 30th anniversary of Black Monday, October 19th, 1987, when the Dow Jones Industrial Average fell 508 points and the S&P 500 saw a one-day loss of 20.5%. The market has certainly come a long way since then, having weathered two more bear markets and continuing on a path to reach all-time highs. From a global standpoint, Equities rallied, despite constant geopolitical noise. Japanese stocks also hit their highest level since 1996. Eurozone industrial production came in strong, but as a whole, this third quarter has slowed after a fast start.

Perhaps an editorial viewpoint:  Given the current equity market environment in which valuations are at record highs and volatility remains seemingly mythological, many investors worry the next bear market may be looming. It has been theorized by some market technicians that markets are about to peak, what Elliot Wave theorists call the fifth wave progression and therefore want to wait for a more optimal time to put money to work. However, trying to time the market with this strategy essentially means times not participating in the market and a portfolio’s value depends more on long-term returns rather than which day or time period you choose to invest.

ETFG Weekly Select List - This week we saw consistency in our ETF Global Weekly Select List.

• Top spots for Sector rankings remained held by incumbents with two exceptions. In the Consumer Discretionary Sector, PowerShares Dynamic Retail Portfolio took over the top spot and in Healthcare, VanEck Vectors Biotech ETF jumped two spots to claim #1.

• In Geographic leaders, there was not much movement with all the leaders remaining atop their respective geographic categories.

• In the Strategy breakdown, two new leaders emerged. WisdomTree U.S. SmallCap Dividend Growth Fund claimed the top spot for the High Dividend category and iShares MSCI EM ESG Select ETF surged into the top spot. We at ETF Global encourage all analysts and even hobbyists to back-check their own strategy utilizing ETF Global Quant Model.

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