11 down, 1 to go. December is here. And while Q4 in general during a big up year is when portfolio managers start to chase the market, December is really when the mad dash happens. Similar to 2023 when the masses entered the year bearish, 2024 has had so many managers waiting and hoping for the big decline, the drop that never came. And now, those folks, once again, are concerned about job security as their portfolios widely trail their benchmarks. They can hope for that elusive December crash, but if that’s the case, they might as well wait for Godot or Bigfoot. On the other hand, they can their cash and plow into the winners and hope they have a big month. As you know, hope is not an investment strategy.

With December starting in an uptrend, the month averages just under a 2% return. When the year-to-date is up more than 20%, December averages roughly another 2% on the upside. Today is one of the most seasonally weak days of the year. On the concerning side, the Investment Company Institute shared that investors plowed more than $44 billion into the stock market during the week after the election.

All year long, I heard from folks (and shared that here) who said they were laying low, playing things close to the vest until after the election. They missed out on huge gains only to chase the market higher now. While that’s not an immediate sell signal, it is a crack in the pavement that needs to be monitored.

Stocks are extended. Fact. Every major stock market index is either at all-time highs are one day away. Interestingly, as I have been writing about since early July, leadership has dramatically shifted away from the hot and sexy AI stocks and into, well, almost everything else. That trend has and should continue to ebb and flow into 2025. If we do see any weakness over the coming week or two, you already know what that means. Buy pullbacks.

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On Thursday we also bought EWS and EIS. We also sold FXI and EZA. On Friday we bought BDEC, more IYT and more QQQW.

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