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Mark Biller

Mark Biller

Executive Editor

Mark joined SMI in 2000. He leads SMI newsletter’s overall content strategy, managing the editorial direction and writing many articles. He led the company’s efforts to create its first web site, helped develop several of SMI’s investment strategies, and has been a contributing author to the Sound Mind Investing Handbook. 

In addition, Mark helped design and launch the three Sound Mind Investing mutual funds. He has served as the Senior Portfolio Manager since the original SMI Fund was launched in 2005. Mark also serves as Senior Portfolio Manager to SMI Advisory Service’s Private Client managed account program.

Mark earned his undergraduate degree in Finance from Oral Roberts University.   

Mark and his wife, Cindy, have three children.

Most Recent Articles

Inflation Soars…Bond Market Snores

Another massive inflation report (PDF) came in last week, and once again the markets brushed it off. The year-over-year increase in the Consumer Price Index hit 5.0% last month, but bond yields were basically unchanged on the news.

May (i.e., this month's report) was the low point in terms of easy "base effects" — meaning that the comps from a year ago have been telegraphing that this month's number should be the peak (simply looking at last year's monthly starting points). That, plus the general belief in the Fed's interpretation that the current inflation is transitory and due to recede rather quickly as the global economy reopens and supply chain bottlenecks resolve, are causing bond investors to not react by pushing interest rates higher as one would normally expect.

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Predictive Ability Is Overrated

One of the central tenets of SMI's investment philosophy is that trying to predict what the market will do next is a fool's errand. While there are a host of "gurus" who have become famous based on a particular market prediction they made, there are very few (if any) that have a consistent track record of making such calls.

From time to time, we've run articles pointing out how poorly "expert forecasts" actually do in predicting the future. Whether it's the direction of the stock market, interest rates, or virtually any other signal, the track record of the prediction crowd is dismal.

However, even more shocking than the fact that so few seem to be able to predict the future are the studies showing how little value even accurate predictions of the future would present. That's hard for most of us to accept because it seems so counterintuitive.

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Big Picture Update

As we head into June, it's an opportune time to take stock of the market's big picture themes. We'll be at the 2021 halfway point before we know it, so here's a quick update on the big market drivers so far this year, as well as what I'm watching as we move into the summer and the back-half of the year.

Several months ago, we started drawing attention to the fact that the year-over-year comparisons for economic data and corporate earnings would hit their low point (easiest-to-beat) in the second quarter of 2021. That was largely due to the "basing effects" of the 2020 shutdowns that created incredibly low starting comparisons in April, May, and June of 2020. The timing of the U.S. vaccine rollout this year furthered those expectations of a big re-opening recovery.

Sure enough, the second quarter opened with a series of explosive economic growth and corporate earnings reports. Economic growth data, inflation, and corporate earnings have all shown strong growth in the April and May data. That strength is just starting to dissipate a bit now, but overall conditions seem likely to remain strong through the end of the quarter.

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DAA – June 2021 Update

There are no official changes to the DAA lineup for June. Read on for the full details.

DAA is a core portfolio strategy designed to help SMI readers share in some of a bull market’s gains, while minimizing (or even preventing) losses during bear markets. The strategy involves using exchange-traded funds to rotate among six asset classes, holding three at any one time.

DAA is a defensive, low-volatility strategy that nonetheless has generated impressive back-tested results when evaluated over full market cycles, demonstrating the power of "winning by not losing."

The recommended categories/ETFs for June are (in order of current momentum):

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Sector Rotation – New Recommendation for June 2021

There is a new Sector Rotation fund being recommended for June. Read on for the details.

Sector Rotation is a high-risk/high-volatility strategy. While its peaks and valleys have been more extreme than SMI's other strategies, it has generated especially impressive long-term returns, as discussed in Sector Rotation is Risky, But Highly Rewarding.

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Stock Upgrading – New Fund Recommendation for June 2021

Stock Upgrading is a mechanical strategy that involves owning mutual funds and ETFs that are exhibiting strong recent momentum. As that momentum fades, holdings are replaced by new selections. The simplest method of selecting funds is to purchase the recommended holdings listed on the Fund Recommendations page.
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Bond Upgrading – New Fund Recommendation for June 2021

SMI Bond Upgrading involves investing half of the bond portfolio in two “core” funds that are permanent holdings. These two funds provide stability to the portfolio. The other half of the bond portfolio is invested in a single upgrading recommendation. This is the selection being updated this month. Read more about how the SMI Bond Upgrading strategy works.
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The Large Impact of (Even) Low Inflation Over Time

Those of a certain age likely have a favorite “price story” to illustrate the incredible change that has taken place over their lifetime. Whether it’s the 5-cent bottled Coke they used to buy at the corner drugstore or the house their parents bought for $2,500 and sold 30 years later for $125,000, the point is the same: today’s dollars don’t buy nearly as much as they used to!

The historical record backs up these anecdotes. As the Federal Reserve chart below illustrates, the purchasing power of the U.S. Dollar has been in constant decline for decades.

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Sector Rotation — Mid-Month Fund Change

For the first time in Sector Rotation's 18 year history, we're making a change mid-month. Read on for the rationale behind this unusual move.

Sector Rotation is a high-risk/high-volatility strategy. While its peaks and valleys have been more extreme than SMI's other strategies, it has generated especially impressive long-term returns, as discussed in Sector Rotation is Risky, But Highly Rewarding.

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Annual Seasonality Signal Triggered, But Think Twice Before Selling

Right on schedule, the stock market is dropping as we hit May. For those who may not be familiar with the old "Sell in May and go away" advice, this is a familiar annual seasonality pattern for the stock market. We'll recap the basics of this topic, then I'll give you my thoughts on this year's signals in the last section of the article (so feel free to skip to that if this is old hat for you).

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