Dightman Captial Group
We manage adaptive investment strategies for individual investors, as part of a comprehensive planning environment, designed to protect capital in sustained market contractions and grow capital during market expansions.

Market & Economic Summary

  

Dightman Capital believes the key to success in today's environment is to remove entrenched investment biases and implement an adaptive investment process and execution ability. 

The following is our opinion of near-term market and economic conditions.

WINTER 2012

GLOBAL INVESTMENTS
Stocks are experiencing elevated levels of volatility which is often associated with market corrections and occasionally significant declines.  International markets have experienced the most pressure.  The overall technical structure of the market has turned somewhat bullish.

WORLD ECONOMY
The Data coming out on the global economy poses serious challenges.   European banks may be experiencing liquidity challenges.  Unemployment in the U.S. remains elevated but improving.

INFLATION DATA
We believe broad inflation will remain stable for goods and services measured by the Consumer Price Index.  There are risks of elevated prices in select categories like education, healthcare and energy.  As developed country economies continue to reduce debt levels, deflation in stocks, real estate and commodities may continue. Despite current monetary policy, inflation is likely to be held in check until National Income and Capacity Utilization have increased.

U.S. RESIDENTIAL HOUSING
It appears housing may be stabilizing in some markets.  Prices are not expected to start recovering any time soon. 

PLANNING
New conversion rules for ROTH IRAs allow high income households an opportunity to fund this unique tax treatment retirement account.

Our Market & Economic Outlook

Most economic and market data is historical in nature which offers limited value in terms of making investment decisions, especially when transitioning from the asset accumulation to the asset distribution phase of life. Fortunately, there are some indicators that have a historical record of signaling turns in economic conditions.  At Dightman Capital, we attempt to blend historical and forward looking indicators to formulate our investment viewpoint.

U.S. Equities The stock market trend can usually be characterised as advancing, declining or moving sideways. Additional detail on the strength, magnitude and length of time for the trend helps determine the current state of U.S. stocks.  A change in the direction of stocks prices usually do not correlate with changes in economic conditions. Generally stock market prices lead economic changes. Once the stock market character has changed, we would expect leading economic indicators to supporting or help explain the change.

U.S. Economic Growth
The intention is to signal business cycle peaks and troughs in advance or early in the change.

U.S. Inflation
The intention is to signal turns in the inflation cycle in advance or early in the change.

U.S. Residential Housing
The intention is to signal turns in the residential housing market in advance or early the change.

The Market & Economic Outlook is not presented as a reason to make changes to our portfolios. More often it is used as a reason not to take action. Stocks spend the majority of their time moving up. However, there may be conditions that warrant a more careful approach to making new investments as well as changes to the composition of exiting investment allocations, depending on the strategy being deployed.

Sources
Dightman Capital uses a variety of information sources when assessing market and economic conditions but the primary sources for the outlook on our website are:

For U.S. Equities http://www.investors.com/

For Economic Growth, Inflation, & Residential Housing http://www.businesscycle.com/