Newsletter: June 2015


Newsletter: June 2015

First of all, we thank all clients for signing and returning all the TD Ameritrade paperwork.  We hope to have the conversion completed by the end of this month.  We believe you will like the results.

Turning to the markets, the indices spent most of the month treading water.  Going back to the end of February (66 past trading sessions) the markets have gone nowhere.  Looking at the daily up and down action, bad economic news seems to help the markets while favorable economic news sends investors to the exits.  The rationale behind this seemingly odd market reaction stems from investor fear that the Federal Reserve will be using any positive economic news as ammunition for raising interest rates.  Hopefully soon the markets will trade on fundamentals rather than what the Federal Reserve says.

On the news front, the game of chicken with Greece continues.  Additionally, there seems to be a lot of hand-wringing regarding whether or not the world economy is actually rebounding.  We expect to see world economic growth to pick up during the second half of this year, especially considering the European Central Bank’s aggressive monetary easing plans – markets like it when Central Bank’s print money!

While this choppy market action and punky economic news can be disconcerting, we believe this is not the time to be bearish or turn overly cautious.  Our four key reliable market variables (market valuation, interest rates, leading economic indicators, and investor psychology) are pointing to a 75-80% chance of higher market prices by year-end.  Attempts to predict the end of this 6+ year bull-run has been a loser’s game.  Our advice is to maintain your invested position and not be seduced into trying to predict a market top and/or imminent decline.  

As always, feel free to contact us any time to review your overall situation and particular needs.  We offer both portfolio management and financial planning (plus good old fashioned general advice) as part of our basket of client services.

If you would like to inform us of any updated contact information, please let us know as well.

Thank you,

Doug, Victoria, Ross, Patrick, and Randall