1st Quarter 2015

WHOA, Nellie!!! The first quarter saw a tremendous amount of volatility. In January and March, the S&P 500 went down by a good clip. However, in February the market shot up like a rocket. But by the end of the quarter, the market went nowhere. On a price basis, the S&P 500 was up 0.44%.

Moving forward, I’d expect more of the same as we are seeing a convergence of market influences (which I will discuss throughout this newsletter). The most important things to understand during times like this are your investment goals and objectives. If you are looking for growth, we will strive to use the dips to make profitable investments. If you are primarily looking for capital preservation, selling into the rallies makes sense.

During times of high volatility, having an iron clad Investment Policy Statement can be the key to goal achievement and peace of mind.

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1st Quarter 2015 Client Newsletter

4th Quarter 2014

Despite the pullback that spanned from the end of September to beginning of October, the S&P 500 posted another year of double digit returns. In fact, the total return for the index was 14.02%. That makes for 3 years in a row of double digit returns and 5 of the last 6, with the only break in that streak being the 2.11% total return posted in 2011.

To me, the most significant thing concerning the markets is the fact that U.S. Consumer Sentiment has broken out of the doldrums and is now registering positive readings. This says to me the U.S. consumer is now optimistic. Historically, this has meant good things for stocks.

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4th Quarter 2014 Client Newsletter

3rd Quarter 2014

The 3rd quarter was a very choppy quarter. Two of the three months registered negative returns for the S&P 500. But the market did eek out a gain for the entire quarter. In fact, the price return of the S&P 500 was 0.61% for the quarter. Which puts the market’s return for the year at 6.69%.

Overall, it is hard to complain about a market that is generating such nice returns. But people’s sense of comfort with the market is still below average. At least a peak at the Consumer Sentiment indicator would imply that, as does the general feedback I get when talking with market participants. But, to me, that is okay. Bull Markets generally don’t end until everyone loves the market. Given this, I think this train just might keep on rolling!

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3rd Quarter 2014 Client Newsletter

2nd Quarter 2014

This market reminds me of an old Aerosmith song I used to listen to; “Train kept a rollin’ all night long. Train kept a rollin’ all night long. I’m in heat, I’m in love…but I just couldn’t tell her so.” Why? Well, obviously this market keeps rolling along. It’s been running since 2009 and so far this year, it is up another 6.05% on a total return basis. And we all like making money, so you could say we are in love with this market. But with all the pockets of uncertainty, we just can’t bring ourselves to formally admit our love.

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2nd Quarter 2014 Client Newsletter

1st Quarter 2014

Considering all the hoopla and action that occurred within the stock market in 2013, the start of 2014 has been the exact opposite; NOTHING SEEMS TO BE GOING ON!! For the first quarter of 2014, the S&P 500 total return was +1.9%. Now I suppose that doesn’t seem like a lot, but if you bought a 5 Year Treasury right now you’d lock in an ANNUAL return of 1.74% for the next 5 years. Given that, 1.9% per quarter doesn’t seem so bad. But, nevertheless, coming off nearly a 30% gain last year, our current market returns seem a tad boring.

But, quite frankly, boring returns at these levels should make all of your financial dreams reality. And that is what it is all about, investing wisely in the market in order to achieve life-long and/or multi-generational financial prosperity.

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1st Quarter 2014 Client Newsletter

4th Quarter 2013

The market never sleeps and our next challenge is beginning to unfold right now. The 29.6% gain the S&P 500 posted in 2013 was great…but it is over.

We are moving on into 2014. And going into 2014 the economy seems to have some momentum behind it. The fact that the Fed is comfortable enough to begin tapering its bond buying program adds credence to that claim. Furthermore, a healthy US economy has proven to be a catalyst for the global economy. And these are very good things to have moving in the right direction.

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4th Quarter 2013 Client Newsletter

3rd Quarter 2013

What we have been seeing since early 2009 is the precise recipe for a Bull Market; market participants talking about all the risks and problems while stocks rally and rally. The phrase used for this is that the market has been climbing the Wall of Worry. And through the end of the 3rd quarter, the S&P 500 has posted a gain of 19.79% on a total return basis during this climb.

Unfortunately, it has become standard operating procedure for the U.S. Government to create the issues that form the foundation for this Wall of Worry. And, of course, as I write this, they are doing it again. This time it is the Budget Debate and issues surrounding raising the Debt Ceiling and Health Care Reform. This should drive market volatility higher, which means we should see stocks experience drawdowns. But by keeping asset allocations in-line and cash at the ready, this could prove to be an opportunity for savvy investors.

Time will tell.

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3rd Quarter 2013 Client Newsletter

2nd Quarter 2013

Although the S&P 500 began to show some volatility near the end of the 2nd quarter, the index still posted solid gains. For the quarter, it was up 2.91% on a total return basis. And at the end of the 2nd quarter, the posted total return number was 13.82% for the year.

As I’ve been discussing in a lot of my research, interest rates are going higher. This fact appears to be the main cause of the market’s volatility. However, it does appear that short-term rates are staying low and the rise in rates is focused more on the long-end of the curve. This has the effect of steepening the yield curve, which generally signals a healthy economy.

Time will tell on how all these moving pieces will shake out, but for now the markets are posting nice gains and the yield curve is getting steeper and, perhaps, more “normal.”

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2nd Quarter 2013 Client Newsletter

1st Quarter 2013

The S&P 500 is behaving like a freight-train, as of late.

This train registered a gain of 10.61% this quarter with the Health Care sector leading the way with its 15.22% gain. The Consumer Staples sector also posted a very nice return of 13.77%. In fact, all sectors showed positive returns. The “lagging” sector was Basic Materials and it showed a gain of 4.17%. To be quite frank, 4.17% is a really solid return, particularly in light of current interest rate levels.

There is no doubt in my mind that this generalized appreciation in the market is due to rising sentiment. The U of M Sentiment Survey is not registering an optimistic reading yet, but it is well off its lows. This could imply the market has further to run, but, regardless, we need to keep our eyes on market-related data and strive to stay ahead of this train.

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1st Quarter 2013 Client Newsletter