Articles About KCM

First published: September 22, 2011


Dear Clients and Friends of KCM:

The recent market activity resembles the waves of nausea a sea-sick sailor feels. At some point, you just want to hurl and get it over with! Maybe then you will feel better?

The ups and downs with Greek debt and the lack of a clear, effective program to get jobs going here at home leave open the concern about economic growth in the developed world. Markets don’t like uncertainty and that is just what investors have at this time. The result: we are all getting sick! There is no dry land in sight: bonds pay little and we do expect interest rate increases which will hurt longer term bonds (irrespective of the FED’s “twist” program).

Real estate is going no where and the future of REIT dividends is still cloudy. Foreign equities may be of some help in the emerging markets but even they will be “unfairly” depressed as the developed world struggles with too much socialism, too little job creation, strong unions, and too much debt. Commodities offer some hope too in that gold (we put that in commodities) and certain specific commodities (like corn) show continued promise. Yet commodity price increases will further dampen economic growth.

The problems the markets face now are not like those of 2008-2009 when investors didn’t understand the problems. Today what investors don’t understand are the solutions. We don’t expect to sell out and go to cash but we do expect to be circumspect about where we put your money to work (and don’t forget we put our money in the same places). History shows, and that includes 2008-2009, that staying invested gives greater return even when it makes you feel sick. So grab your buckets, we are in for a bit of rough seas until we will find calm waters.

Our best wishes to you all at this trying time,

Jim Kelly & The KCM Team

©2016 Kelly Capital Management, LLC