"Economy moving along at strong pace, but recent trading no fun" by: John Sample

   August and September are historically poor months as it relates to performance in the equities markets. 
   The start of this period better not be a foreshadowing of what is to come or we are in for real pain. 
   I don’t think that is the case. We again moved back from record highs for the fourth time in less than a year. 
   The economy is moving along at a relatively strong rate. 
   It is however no fun in a mere three or four trading days to drop 6 to 7% from last month’s record highs. That is far from a correction but it certainly gets your attention. 
   The rubber meets the road on what will happen next. I do not foresee a substantial move down. I see this as a move by money managers to take their profits. Even at these lower levels, the multiples on the various indexes and averages have not moved back to value levels for me. 
   I suggest that we will use the rest of the year to move back to those record high levels. 
   I hope on the previous occasions that you took the opportunity to take profits and raise cash.
   We are in the midst of an election and all of this makes great debate points on the pros and cons of the trade war. 
   It has yet to bring a real impact 
on the U.S. economy. This is easy to say if you are not in the agricultural business. 
   That is one area where it really will cost money as it appears that the Executive Branch will step in and subsidize some losses. 
   No matter what anyone says, we operate in a zero sum game. Every action impacts someone somewhere. It is just the level of the impact that determines the significance.
   An example of consequences is the dollar is increasing in value from the simple fact that the U.S. economy is performing better than most of the world. 
   That is not helped by China not supporting its currency. 
   Look at the exchange rates of the Pound and Euro to realize how poorly Europe is doing. 
   This makes exports more expensive. It does point out how important our trade with Canada and Mexico has become, not to mention South America.
   The energy sector is one area punished more than any other. It appears the only people following the sector are those shorting energy stocks. 
   The problems begin with the price of crude. We produce too much oil and natural gas. 
   With the potential for Iranian oil coming into the market, it is hard for OPEC to control oil prices.
   I would say this is an area of value but it would take real belief to go there. 
   I am not selling my shares and I am enjoying the dividend. 
   I have seen this before, and while I don’t see significant gains, I’ll take the dividend until this, too, passes. 

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