Global stock markets are trading near their highs and holding steady since our last post, mid-summer. Bond prices have generally held their gains off their early year lows. Global economies continue to grow modestly. As well, markets don’t seem to be reflecting much concern over confused expectations for tax reform or fiscal stimulus. Repatriation of overseas profits still seems to be an expectation. Many are expecting an autumn pullback, and market sentiment indicators seem to be tipping towards some sort of modest correction. Right now it doesn’t feel like there’s any action to be taken, although it’s always important to be on the lookout for longer term shifting trends in the economy and markets. We think broad diversification in and within asset classes is more important than it has been since the market bottom in early 2009.
Well, we’ve had a nice run in the U.S. stock market, especially if you look all the way back to the bottom in the spring of 2009. The question on most investors’ minds is whether it’s time to re-balance, or not. As we noted in our post at the end of the year, the important things to pay attention to this year are; the Fed, politics, and the economy. So far, so good. The economy continues to improve, the market is absorbing big changes in the political structure without much disturbance, and the Fed seems to be holding it’s line on rate hikes. So, although there seems to be no compelling reasons to change strategies at this point, re-balancing portfolios has more to do with preparing for the future than reacting to current conditions. There are two futures to prepare for; yours and the market’s. Our clients tend to fall into three general age categories; Emerging Investors (20s-30s,) Peak Earners (40s-50s,) and Retirees (60+.) Each age group should respond just a little differently than the others to the need for investment re-balancing. Emerging Investors probably need to be least concerned with re-balancing. Once their long term allocations are set it becomes more […]
July and August were good to stock investors after the Brexit dip. In the end, Q2 earnings came in mixed. That is; some stocks in each sector turned in good earnings and some stocks in each sector turned in not so good earnings. The market seemed to like most of it, and the S&P was up nearly 10% off the July low. Then, this week, we hear from the Fed that the second interest rate hike is imminent. There was a bit of a delayed reaction, but market participants seem to agree, all at once, that stock and bond prices need to get cheaper. The S&P is off by 2.3% and small caps by nearly 3.3% as I type. We suspect the weakness will continue a bit as the market continues to adjust to the not-so-new reality of a rate hike. It’s a good time to look at our allocations to stocks, bonds and other interest rate sensitive investment to see if we’ve gotten too enthusiastic about any asset class or sector; if we’ve got any positions we’ve become concerned about longer term; or if we’ve got any positions that have had big moves that we may want to trim. The […]
Over the next few weeks we’ll be transitioning our blog subscribers over to our new Marin Wealth Advisors Blog. As before, you’ll see simple, timely tips to help you with your investing and financial planning responsibilities. What’s new is that you will also see posts from my associates, Ed Burke and Wayne Best, as well as posts from our professional friends with deep knowledge in tax planning and estate planning. Thank you for reading and staying connected. Bob Hunter