Just prior to the initial market selloff in 2011, we warned subscribers of the Intelligent Investor of a market correction in the May 2011 issue. We also provided warnings a couple of months earlier pointing to a weakening global economy in the second half of 2011. The peak risk during this cycle occurred in early October 2011.
Since then we have seen few absolute improvements. Rather, it has been an environment of relative improvement with the U.S. capital markets as the main benefactor. Meanwhile, the U.S. equities markets have benefited from both positive and negative developments in Europe.
Over the next several weeks we believe a new risk cycle will begin.