NAAIM Speaks is monthly newsletter containing market insights and analysis from NAAIM member firms. This newsletter is designed to provide a plethora of market analysis, indicators, some occasional humor, as well as a summary of NAAIM’s proprietary Dynamic Asset Allocation Model and Managers Exposure Index. The report is for informational uses only and is not to be construed as investment advice.

Looking Ahead to Better Days

By: David Moenning, Heritage Capital Research

Published: 10.31.22

From my seat, the tone of the stock market has clearly improved of late. My take is the improved mood is based on the idea that we’ve seen the peaks in inflation and, in turn, Fed hawkishness. In other words, managers are putting some of their cash stockpile to work in the hope that the worst of the inflation surge and the Fed’s fight is behind us. As such, the bottom line is if you are a fund manager looking out over the next year, this seems like an okay spot to start adding positions. To be clear, I am not “calling” the bottom of this bear market, but….

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Be Sure To Look Under The Hood

By: Paul Schatz, Heritage Capital LLC

Published: 11.7.22

On Friday the government released the employment report. The economy grew by 261,000 jobs versus the 205,000 estimated. On the surface that is great news. However, when you have a Federal Reserve hellbent on destroying demand, this kind of economic strength only feeds fuel to the higher interest rate fire…

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Room For Improvement

By: Ryan C. Redfern ShadowRidge Asset Management

Published: 10.28.22

Since the mid-October lows, there seems to be a little more stability and less volatility in the movement. On our monthly market commentary webinar earlier this month, I showed two paths that the markets could take. On one hand, they could continue to trend down as they did in 2008. On the other hand, they could follow a more seasonal pattern of finding a bottom and rising into the end of the year. Personally, I don’t expect to see positive numbers by Christmas, but there is still plenty of room for improvement…

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The Message From the NAAIM Indicator Wall

By: National Association of Active Investment Managers

The NAAIM Indicator Wall provides a weekly update to a robust array of stock market indicators. The “wall” includes readings and explanations of indicators and/or models in the areas of price/trend, momentum, key price levels, overbought/sold readings, sentiment, monetary, economic, inflation, and market cycles.

This time, we’re featuring the Fundamental Factors Board , which is summary of key external factors that have been known to drive stock prices on a long-term basis.

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Link to NAAIM Indicator Wall

Note: The Indicator Wall is a benefit provided to NAAIM Members and is password protected. To obtain a temporary password, contact NAAIM at 888-261-0787.

What We Need To See

By: Rob Bernstein, RGB Capital Group

Published: 10.31.22

As I have indicated in the past, I don’t believe that we will see a sustained uptrend in risk assets until interest rates either
level off or start to drop. With interest rates across the yield curve continuing to climb higher, I doubt that the recent
uptrend will be the start of the next long-term bull market. However, it doesn’t mean that a shorter-term rally isn’t
possible; especially as we enter a generally favorable time of the year for the stock market…

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The Tide Has Turned

By: Craig Thompson, President Asset Solutions

Published: 10.31.22

Bottom Line: Improvement in market technicals suggest a tradable rally going into a seasonally strong end-of-year period. The duration of the advance that follows tends to depend on the market environment meaning that during bull markets it tends to signal a long-term bottom and during bear markets, it signals a shorter-term advance or tradable rally…

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The NAAIM Dynamic Allocation Model

Designed to be a value-add benefit to membership, NAAIM offers a Dynamic Asset Allocation Model based on the NAAIM Indicator Wall of indicators and models. The overall objective of the model portfolio is to dynamically adapt to changing market environments and to keep equity exposure in line with conditions. The model targets a normalized allocation of 60% stocks and 40% Bonds.

Here is this week’s model allocation:

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The model has been run live on the NAAIM website for several years and has demonstrated the ability to reduce exposure to market risk during negative environments such as those seen in 2015-16 and 2018.

More on the Dynamic Allocation Model and Historical Readings

The NAAIM Dynamic Allocation Model is for illustrative and informational purposes only, and does not in any way represent an endorsement by NAAIM or an investment recommendation.

The Waiting Continues

By: Sam and Bo Bills Bills Asset Management

Published: 11.4.22

For all those waiting on a Fed pivot, the wait continues. As we have noted over the last several weeks, we have taken Chairman
Powell at his word and viewed the talk of a pivot premature. The Fed continues to be in a box of their own making. With inflation
remaining stubbornly high, the Fed has no choice but to continue raising rates and talk of the Fed pivoting to a more dovish stance remains somewhere in the future…

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New Leadership!

By: Dexter P. Lyons Issachar Fund

Published: 11.7.22

I see a leadership change out of the over-owned “cloud” stocks and into the “tangibles” (things you can drop on your toe) like building, electronics, energy, food, medical, metals, and telecom. Institutional distribution is occurring out of the mega-techs and into energy, our biggest weighting. As institutional money leaves one area, it looks for a welcome home because big money has to go somewhere…

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The NAAIM Member Exposure Index

The NAAIM Exposure Index represents the average exposure to US Equity markets as reported by our members in the organization’s weekly survey. Note that many NAAIM members are risk managers and tend to reduce exposure to the markets during high risk environments.

Click To See the Current Exposure Index

NOT INVESTMENT ADVICE. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Investors should always consult an investment professional before making any investment.

Tags: NAAIM, NAAIM Speaks, Stocks market analysis, Stock Market Analysis, Stock market, stock market indicators, David Moenning, Paul Schatz, Rob Bernstein, Ryan Redfern, Sam Bills, Bo Bills, Dexter Lyons, Craig Thompson, NAAIM Exposure Index, NAAIM Dynamic Allocation Model