Highlights of this Week’s Update:
- Markets saw increased volatility last week due to international events, but ended the week slightly higher.
- Interest rates dropped while gold prices rose.
- Our outlook remains the same-Underweighted overall in stocks/equities and focused on individual company stocks in lieu of stock mutual funds.
- There may be more than one way to look at something.
Read on for more details…………………………………………………………………………..
Last week the major U.S. stock indices were up on Monday, down Tuesday, up Wednesday, down Thursday, then up again on Friday ending with slightly positive results overall for the five trading sessions. The S&P 500 was up .3% by the end of the week. (Big Charts, MarketWatch).
Interest rates edged lower last week, with the yield for the 10 year U.S. Treasury falling to 2.44%, while gold jumped $18.50 per ounce. The rate for a 30 year fixed rate mortgage averaged 4.25% this morning, while the 15 year fixed rate dropped to 3.18%. (Bankrate.com)
Global headwinds and markets
The inspiration for last’s week’s action: primarily news flowing from the global arena, and most of that was in response to the Russia/Ukraine crisis.
Much of what’s happening is simply geopolitical fears that temporarily create an unusual amount of uncertainty. Longer-term, it’s any possible economic impact from uncertainty that will have a longer-lasting impact on markets.
For example, new sanctions against Russia by the European Union were met with a set of restrictions by Russia, which increases the stress on Europe’s fragile and uneven economic recovery. It’s why European stocks have slipped over the last month (StockCharts). U.S. companies aren’t completely immune but have a more diversified customer base than their counterparts in Europe.
By week’s end, stocks erased losses after Interfax reported Russia had ended military exercises the U.S. had criticized as a “provocative” step. The report followed secretary of Russia’s Security Council, who told state-run RIA Novosti news agency that “Russia will continue to make all efforts for a very fast de-escalation of tensions (Wall Street Journal).” Posturing in a global chess match or something more permanent? Only time will tell.
In the meantime, a renewal of U.S. military strikes in Iraq did little to dent the enthusiasm on Friday. Notably, the price of oil barely reacted (MarketWatch).
Our view moving forward has not changed. We feel stocks remain overvalued at present, and have kept portfolios at all risk levels underweighted in stocks/equities. We continue to hold both fixed income/bond assets as well as the commodities based assets as part of the portfolios. We are focusing on individual company stocks for our equity exposure, which allows us to be more selective in the particular investments we hold at this time. Don’t forget you can access your account information and portfolio performance data online at any time.
Remember: There are Two Sides to Every Story (What you see may not be what you think):
We saw this and thought we’d pass it along this week-
Have a great week and don’t hesitate to call with any questions, or if we can be of further service at any time. We appreciate the privilege of serving you.
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.