Spring is around the corner and as warmer weather moves in and the snow and ice begin to melt, it marks a change in the seasons. Let’s see if there are any changes in our look at the markets:
Summary, Last Qtr: In Q1, we saw major swings in gasoline prices which have settled on lower prices overall. Additionally, the U.S. added 295,000 jobs and the unemployment rate fell to 5.5%, although some people simply stopped looking for jobs and thus were no longer counted as unemployed. Meanwhile, the Federal Reserve held firm in their current accommodative stance. More jobs and lower gas prices along with a still-accommodative Fed have led to moderately higher household spending, which should help spur the economy a bit.
Our Commentary: We expect market volatility to remain for some time, and advise to accept the possibility that volatility may be more common than it was pre-2008. Our stance remains the same; we like U.S. equities and are hesitant towards European equities and other international areas not only because of the economic situations inherent in those areas, but also because of a rising dollar (the exchange rate may hurt positive returns). Bonds are still an area of concern as we have taken the “lower for longer” stance, meaning we expect bond rates to remain low for a longer period than originally expected. That means we are hesitant about long term bonds but ok with intermediate to short term bonds. Natural resources remain weak and real estate is showing some signs of life, albeit at a slower than desired rate. Lastly, the Supreme Court has started to hear arguments that could impact the national health care system. We currently favor the healthcare sector, but if the Supreme Court decides against the health care system, this could impact our favored status on health care.
Our Investment Committee periodically monitors the markets and will continue to provide comments at the beginning of each quarter. Each portfolio is different and we recommend getting individual help, which we are happy to provide.
Here’s to spring time and warmer weather!
International investing entails special risk considerations, including currency fluctuations, lower liquidity, economic and political risks, and differences in accounting methods. Past performance cannot guarantee future results.
Fixed income securities carry interest rate risk. Fixed income securities also carry inflation risk and credit and default risks. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss.
Certain statements contained within are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties.
Opinions voiced are not intended to provide specific advice and should not be construed as recommendations for any individual. To determine which investments may be appropriate for you, consult with your financial professional.
Indices are unmanaged measures of market conditions. It is not possible to invest directly into an index. Past performance is not a guarantee of future results.