Category Archives: investing

Heads Up!

Posted on by

It’s been a while since the last stock
market correction has occurred; the summer of 2011 to be exact.  A
technical correction is defined as a price decline of at least 10% to a
security or market index following extensive price increases.  Technical
market corrections are not necessarily bad as they help deter “bubble” like
valuations. 

We regularly monitor economic
developments and still believe in the economic recovery and slow growth cycle.
We would advise not to be alarmed if a broad stock market correction were to
occur.  Accordingly, we have placed great care in the construction of the asset
allocation to reduce the downside in portfolios if a correction were to
occur.  The bond sleeve is designed to resist stock market volatility,
while the alternative strategies reduce your downside exposure by employing
various tools to hedge risks.  Equities are selected based upon risk
factors that are lower as compared to their peers.  It is our belief that,
through appropriate diversification, we can weather a correction while continuing
to achieve your long-term return goals.

Heads Up!

Posted on by

While
it is exceptionally difficult to forecast stock markets dips and bounces, I
believe it pays to keep an eye on the reality of the current situation.  When I assess the points below, I feel confident that investors owning the
stock of great companies will be rewarded in the future:

  • The stock market
    appears to have resumed its positive up-trend.
  • Banks and credit
    markets are stable.
  • Employment data
    is improving.
  • The U.S. is
    having an energy “revolution”.
  • Loan demand is
    picking up.
  • Corporate
    profits remain strong.
  • Low inflation
    continues.
  • GDP is growing.
  • Consumers
    continue to pay down their debts.
  • Many Economies
    around the world are growing.
  • Manufacturing is
    strengthening.


The Markets This Week

Posted on by


It has become a familiar refrain this year but one that’s by no means unwelcome: Stocks hit record highs last week. The Dow Jones Industrial Average closed above 15,000 for the first time, and equities rose about 1% on a lack of bad news, on decent earnings and economic news, and perhaps from just plain habit.


Nothing seems to unnerve this market; old bogeymen, like European debt woes and North Korean saber-rattling, remain locked in the basement for now, says Jonathan Corpina, a senior managing partner at Meridian Equity Partners. The worry, if there were one, is that such concerns could return and swat the market during the soon-to-arrive languid summer months, a time when markets traditionally look for things to worry about, Corpina adds.


For now, investors are busily rotating out of defensive stocks, he says, and moving money into technology and financial shares. Our guess is that only a sudden swoon will change that.


On the week, the Dow closed at 15,118.49, up 145 points, or 1%, and an all-time high. The S&P 500 increased 19 points, to 1633.70, also a new high-water mark. The Nasdaq Composite index jumped 1.7%, or 58 points, to 3436.58.


With the Dow up 15% already this year, it’s getting tougher to find relatively cheap stocks inside this 30-member and exclusive megacap club. The average 2013 ratio of price/earnings per share for the index is now about 14, with a high of 21.5 times for Home Depot (ticker: HD) and a low of six for Hewlett-Packard(HPQ), according to Thomson Reuters. The average earnings-per-share growth expected this year is just 3%.


For investors looking at the Dow now, it’s worth noting that in the past three weeks the broad market has seen a rotation into stocks in sectors like tech, up 9%; materials, up 7%; and energy, up 6%. Concurrently, defensive sectors that have been popular all year—consumer staples, health care, and telecoms—have begun to trail the market. That could represent a shift to a search for growth from a search for yield Source:  Barrons Online).