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In 2014, I started to talk about the bull market run in the US Stock market and that it only made sense that there was a future US stock market correction and asset class performance rotation on the horizon. I have repeated that blog for the last two years. There is a thought in our business if you hold onto a forecast long enough you will be right. So, let’s check in to see where we are in 2017 YTD based on some indexes from Morningstar:

Asset class performance is rotating while we see very high US stock valuations. How do we spell correction for the US stock market? When will it happen? All I can tell you is that it will. If I forecast that for the next 3 years, I will most likely have my forecast validated. But, why waste the time?

So, if we accept that we are planners and we are helping our clients reach their goals, what does that mean to us? First, we must accept we cannot time the markets. Warren Buffet says he cannot, but collects companies and is patient to be successful. So, we need to stay in diversified portfolios and be patient.

The question is…is the average US investor diversified? According to JP Morgan, the answer is No. Consider the following data from Morgan:

We buy long term forecasts from two firms. They both are telling us that in the next 10 years to expect low single digit returns for US stocks. This is not what we are seeing right now as the “Trump effect” continues to push US stocks to higher levels. As I write this, the S&P 500 is down 1.8% as the market digests the memo news from FBI Director Comey. Is this the start of the correction we think we see on the horizon? Who knows? But if you are trying to save for retirement, close to retirement, or living off your portfolio in retirement, now is the time to make sure your portfolio is diversified especially if you are over allocated to US stocks.

For more information on this topic or a review of your situation, please do not hesitate to contact Peter.  Peter B. Smith is a Family Wealth Advisor at the Planning Solutions Group in Fulton, MD and is an Annapolis resident. He can be reached at 301-543-6008 or by email at