Summary of This Week’s Update:
- Markets are closed on Friday, April 18th in observance of Good Friday, and our offices will be closed as well.
- Remember: If you need a distribution from your investment account, be sure to call our office and give us as much advance notice as possible, as it can take three business days (not including holidays) for a sale of a security to settle and for cash to be available.
- The stock market, as measured by the major U.S. indices, has continued to weaken last week and the major fallout has been in the “momentum” stocks with the NASDAQ Composite dropping 8.7% from its March 5th high through mid-day today. (Google Finance)
- We continue to stay cautious and underweighted in stocks/equities for all risk levels, and are pleased with the overall results we have seen so far in 2014.
Upcoming Holiday:
A quick reminder, the stock and bond markets will be closed on Friday April 18th in observance of Good Friday. Our offices will be closed as well. We want to wish all of you a safe and Happy Easter Holiday!
Reminder: Cash Distribution Requests:
Please remember the more advance notice you can give us for any cash distributions needed from your account the more able we are to process the request on an efficient and timely basis. If assets have to be sold to cover the cash demand, it can take up to three business days for the trade to settle (not counting any market holidays) and have the necessary cash available to send out to your bank account. Cash requests should be made by phone or in person to be sure they are received by a member of our staff for accurate and timely processing. Also, if you change banks or account numbers, be sure to notify us as soon as possible as this can delay a distribution as well.
The Markets:
“We are seeing a rotation away from momentum stocks, which is healthy but unsettling. Everyone rides them up, and all it takes is a little bit of bad news on one of them that triggers selling. (At that point) it could be a feather that finally tips (them) over.” So says Jeremy Siegel, the well-respected and often quoted finance professor at the Wharton School of Business at the University of Pennsylvania (USA Today).
Once again, we saw another burst of selling in the highflying momentum plays, including the biotech and the social media stocks (Barron’s). And we saw some of the selling spillover into the broader market last week. Continued concerns over events in Ukraine have also weighed on the markets.
According to data provided by MarketWatch, the S&P 500 Index and the NASDAQ Composite both registered their biggest weekly declines since June 2012. The Federal Reserve’s bond-buying program, which has flooded the financial system with cash, has been one factor propping up stocks and likely fueling the surge in riskier, momentum-oriented equities. The Dow Jones Industrial Average is now down 3.34% year-to-date through last Friday. This is still a fairly small decline overall at this point. A “correction” is considered to be a drop of at least 10%.
Our Outlook:
We have remained cautious and are starting to see our overall allocations within our different risk levels perform more in line with what we have been expecting over the past year. Stock indices have declined in general, while commodities and fixed income assets have gained and produced positive results so far in 2014. The “value and dividend” oriented stocks have also performed well relative to the stock market in general. We continue to remain underweighted in stock/equity exposure across all risk levels. We will keep you advised.
We hope all of you get to spend some extra family time this coming weekend, and are able to enjoy the start of spring. Hopefully we will not see the snow and freezing temperatures we have experienced this week!
God Bless,
Your TEAM at F.I.G. Financial Advisory Services, Inc.
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1 The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly. Past performance does not guarantee future results.
3 The S&P 500 Index is an unmanaged index of 500 larger companies which cannot be invested into directly. Past performance does not guarantee future results.
Uncertainty and Volatility