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February, 2015 Review and Outlook

By March 3, 2015September 16th, 2023No Comments

Highlights of this Month’s Review:

  1. This Month’s Book: “David and Goliath” by Malcolm Gladwell.  A great read.
  2. Call us today to get set-up on the MyWealth system for your own finances if you have not yet done so.
  3. Stock Indices gained ground in February, and now the NASDAQ claims the 5,000 level for the first time since 2000.
  4. Inflation drop mainly attributed to lower oil prices at this point.
  5. FED rate hike still may be on the table later this year.
  6. Our allocations for all risk levels perform well relative to risk so far in 2015.


Book Review:

This past month I have been reading “David and Goliath”(Underdogs, Misfits, and the Art of Battling Giants) by Malcolm Gladwell.  I have found the book to be very enlightening and insightful regarding life in general.  The book is filled with discussions on how success was achieved through unique approaches in various real life situations.  Starting with the story of David and Goliath from the Bible and how David perceived and defeated his enemy, to coaching youth basketball, to the overall educational system and misconceptions.  I thoroughly enjoyed the book and would highly recommend it to all.  It will challenge your traditional views and hopefully get you thinking “outside the box” as to various life challenges that appear unsurmountable.  

MyWealth System:

If you have not yet talked with us regarding the new MyWealth financial management/planning system, please call us today to schedule a time we can review this with you and set-up your own financial website today.  MyWealth will not only give you a great tool to manage your own personal finances as well as a complete and detailed long term financial planning system so we can assist you in completing an monitoring your own long term financial plan.  Call us today!

The Markets:

As February came to a close, investors brushed aside the worries that bubbled to the surface in January and refocused on the fundamentals – an expanding U.S. economy, rising corporate profits (Thomson Reuters), and lower interest rates. And with it, the Dow Jones Industrials and the S&P 500 both gained for the month, while the NASDAQ Composite finished the month within striking distance, or 37 points, of 5,000. In today’s trading, it did break 5,000 to end at 5,008.10. The Dow rose 5.64% in February, while the S&P 500 ended 5.49% higher.  The Dow is now up 1.74% after two full months of 2015, and the S&P 500 has risen 2.21%.

Interest rates rose overall in February, with the 10 year U.S. Treasury rate at 2% at month end.  The rate for a 30 year fixed mortgage ranged from 3.75-4% and the 15 year rate was 3-3.375%. (U.S. Treasury,

Oil prices rose with the price of West Texas Intermediate Crude gaining .93 to end the first two months of the year at $49.52 per barrel.  Gold dropped $46.25 per ounce, finishing at $1,214.00 per ounce.  (CNBC)

The on-again, off again series of gradual rate hikes from the Federal Reserve may finally be on again, according to the end-of-February Congressional testimony by Fed Chief Janet Yellen.  In her semi-annual Monetary Policy Report to Congress, Yellen conceded that more needs to be done on the job front, but she acknowledged there has been “important progress” toward one of the Federal Reserve’s key objectives – full employment.

Bureau of Labor Statistics data reveal the steep decline in oil prices is largely responsible for the downturn in overall inflation. In January, the broad-based PCE Price Index fell 0.5% from the prior month and is up a scant 0.2% from the prior year (Bureau of Economic Analysis).

But if you look at what economists call core inflation, which removes food and energy, price increases have been fairly stable and benign – less the 2% annually for almost three years (Figure 1). For the Fed, that is too benign, as it remains below its annual goal of 2%.

PCE Graph

What’s noteworthy is that we haven’t seen the drop in oil prices bleed through to the broader price level. That’s not too surprising since an expanding economy doesn’t incent businesses to cut prices. Think of the airlines, which have barely reduced airfares per BLS pricing data. And oil prices won’t fall forever. While Yellen didn’t get overly specific, much of her language was designed to lay the groundwork for a rate hike later in the year.

Our Outlook:

With interest rates remaining at such low levels, we don’t see a major drop in stocks for the near term.  Indicators we watch point to higher or a sideways for the near term-between now and the end of the summer.  We have continued to focus on individual stock issues for the majority of our equity/stock exposure over the past two years.  We have adjusted allocations for all risk levels, and so far in 2015 the current allocations have performed well relative to risk and the markets in general.  We will continue to monitor and make adjustments as warranted.  Remember, the Performance Tab in the Liberty system allows you to monitor your own personal results and portfolio allocation.  The MyWealth system online also provides you with daily updates on values and specific holdings

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.

2 The NASDAQ Composite is an unmanaged index of 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.

5 New York Mercantile Exchange front-month contract; Prices can and do vary; past performance does not guarantee future results.

6 London Bullion Market Association; gold fixing pricing at 3 p.m. London time; Prices can and do vary; past performance does not guarantee future results.


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