We have been writing for several weeks about understanding risk. My favorite metaphor is to salt. Easy to get in, hard to get out.
Regardless of the "reasons" for stock market declines in excess of -2% + ; the real reason has to do with FORWARD expectations of growth and inflation. We care about what counts (growth, inflation, and earnings) over a duration of time.
The investment grade bond market sent a wonderful signal about 8 weeks ago as did the credit markets (econ. sensitive bonds). Stocks (growth) are generally the slow kids in the class.
Per our last several notes, we have found value in assets lesser correlated to the broad stock market (floating rate bonds, fixed-float hybrid preferred, selected REIT etc.). First ten rules of Investing: 1-10: Do Not Lose Your Money
Attached and is a short piece authored by Dimitri regarding where to find value in the stock market when the reality of slowing growth/late cycle starts to be acknowledged, "Show Me the Dividends". The easy stock trade appears over for now.
As usual, thank you for investing with Forest Capital! For additional information on portfolio positioning, please contact Forest Capital directly at firstname.lastname@example.org.