Mid-September delivered a market jolt like we have not seen since the scary days of early 2016, and brought to mind the big August/September of 2015 selloff that kicked off the period of sharp volatility that ran into last Spring. And, while yes, the bull market in US stocks is now so long in the tooth as to be nearly toothless, with many stocks overvalued and most facing the headwinds of near-certain interest rate hikes, and yes, while stocks seem pretty well primed for a sharp correction or even bear market, still I do not think the big plunge is quite at hand. There are a lot of forces at play, and I expect they will keep US stocks at overvalued levels, and even allow them to reach new highs, into next year and possibly 2018. But the handwriting is on the wall, and the storm will come. It is noteworthy that when it hit the fan on September 9th, when the DOW dropped nearly 400 points, the S&P about 2.5% and the Russell 200 over 3%, that much of the rest of the world was more resilient. For instance, Europe was only down about 1%, and Asia less than 1.25% – despite the fact that the US economy is clearly the strongest in the world, including those regions. The important fact, I think, is that many non-US stocks are much cheaper in terms of earnings capacity than US ones – and ultimately market participants should acknowledge this, and those stocks will approach fair value and enjoy very strong rallies of their own, while overvalued US stocks slip far behind, into bear territory. These expectations are the primary reason we have increased our AIMS™ allocations to non-US stocks, and emphasized US value stocks, which we predict will be less affected by the expected market downturn than those whose prices are less tethered to underlying economic reality. The Ides of September (Ides of course being a Roman term for middle-of-month days) were also unkind to bonds of nearly every stripe, as the reality of Fed interest rate hikes begins to sink into the market psyche. Even German bunds – which have been in negative interest rate territory for awhile – have gone lately down in value enough to actually pay some interest, a real wonder in the current financial times of the “new normal” of negative interest rates. As we have been warning for awhile, we think this is the beginning of a long, painful slide for bond values, and counsel bondholders to take a hard look at the duration risks in their individual holdings – and in bond mutual funds, which bear the same risks, thought they may be less evident. Camarda has been sensitive to this risk for some time, and has positioned its client portfolios accordingly.