Monthly Commentary

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July 2015
    • In the first half of 2015, the long-running bull market continued to overcome a variety of potential stumbling blocks.
    • With ECB stimulus blazing, Europe has been a pleasant surprise this year.
    • While the mechanics of policy normalization can test near-term resolve, investors must remain focused on their long-term goals.
    • If the bull market that arose out of the Great Recession taught us anything it’s that waiting on the sidelines for a precise entry point is pure — and costly — folly.


June 2015
  • Beginning to normalize the policy rate should actually bolster confidence in the economy and the markets and allow us to once and for all leave the Great Recession behind.
  • M&A activity has been red hot in 2015, suggesting confidence in executive boardrooms.
  • Earnings surprised mightily to the upside in 1Q, but 2Q expectations remain dim.
  • While the math of rising rates discounts financial assets, the growth that prompts the rate hikes should be far more important in sustaining this bull market in the long run.
May 2015
  • April Fools investors with sharp positive reversals in quarterly profits, crude oil prices and European bond yields.
  • Oil prices bounce off their lows, providing relief to the energy sector while continuing to be a positive catalyst to consumers.
  • California is coming to the realization that “water is the new oil” as farmers and consumers thirst for a solution to the multi-year drought.
  • Perennial laggards Europe and Emerging Markets surge in April demonstrating that patience in diversification matters.
April 2015
  • Domestic large cap indexes have lagged as oil prices and dollar strength weigh on giant multinationals.
  • The negative impact of normalization has outpaced the expected benefits, a trend likely to be evident in first quarter earnings.
  • Earnings in the energy sector are expected to drop precipitously, and the abandonment of new projects could impede future growth.
  • Tighter U.S. policy combined with rampant easy money globally may be a game changer for asset allocation strategies.
March 2015
  • February’s rally showed that the market’s most strident bears were overeager in calling the end of this nearly six-year bull run.
  • Fourth quarter earnings outpaced expectations that had been ratcheted down sharply in the face of plunging oil prices.
  • Massive exposure to large-cap equities could make for a crowded trade should investors look to flee a flagging S&P 500.
  • Signs of life in Europe and other non-U.S. markets highlight the importance of broad, global diversification.
February 2015
  • While there’s been no shortage of risks to roil investors here in the new year, it’s more important to focus on ever-growing corporate earnings and adequate diversification.
  • Any increase in interest rates during 2015 will be the result of domestic economic strength — which is a good thing.
  • The overall net effect of lower oil prices is positive and should help support global economic growth as central banks step up their stimulus efforts.
  • If tech sector earnings are any indication, corporate America should be able to navigate around the challenges of a strong dollar.
December 2014
  • Heading into 2015, the global economy is on a sustainable growth trajectory despite rampant volatility from plummeting oil, deflation in Europe and growth concerns in China.
  • We’ve built our 2015 forecast employing a multi-faceted framework called TRED that includes four inputs:
    • Tectonic Shifts in Energy, Global Trade, Technology, Frontier Markets and Water are broader, unifying trends driving true change.
    • Rates — inflation rates, central bank policy rates, discount rates, exchange rates — provide a window into the overall economic health of country, region and global economies.
    • Earnings deliver an unbiased view of the strength or weakness of a cross-section of global and domestic companies.
    • Diversification enables investors to pursue a thoughtful, considered investment philosophy focused on prudent investment discipline.
  • Building wealth is predicated on taking risk, not avoiding it. A reliable and an adaptive approach to assessing that risk on an ongoing basis is essential to developing resilience in the face of potentially volatile markets.

November 2014
  • After weeks of struggles, market strength returned quickly in mid-October.
  • The expansion of the BOJ’s quantitative easing program surprised markets and may provide inspiration to central banks in Europe and China.
  • As corporate America surges to all-time high EPS, domestic macro conditions continue to improve.
  • While Republicans took control of Congress with the midterm elections, policy impact may be minimal.

October 2014

  • While the success of the Fed’s aggressive QE program surprised the markets and the central bank…
  • …Europe hasn’t gotten the memo, continuing to dither over the scope of its asset-purchase program as recession and deflation loom.
  • Markets across the globe — with the exception of long Treasuries and domestic large cap stocks — were hard hit in the third quarter.
  • Though volatility has risen, it remains modest; investors should take this opportunity to broaden their portfolios at more attractive levels.

September 2014
  • A hawk in dove’s clothing, Yellen will likely be ahead of the curve when it comes to hiking rates.

  • Winding down quantitative easing and zero interest rates will bring greater market volatility.

  • Driven by strength in manufacturing and a revitalized consumer, corporate America is thriving.

  • The euro zone is an economic basket case, forcing Draghi to reach for another “bazooka” solution, to the likely benefit of risk assets.

  • Broad, globally diversified portfolios can help protect investors against the volatility that policy normalization may bring.


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