Archive for July, 2016:

weekly investment client update for July 29th

Written on July 29th, 2016 by Jamesno shouts

One important question every new client asks is “how much communication do you have with clients?”  Here is a sample email that I send out each week to my investing clients to discuss what is happening in the markets:

Weekly Investment Update for July 29th

I guess I could just copy and paste last weeks update in today’s email.  The market has done a whole bunch of nothing as shown from the price chart of the S&P 500 below.  We have basically been trading sideways for 2 solid weeks now…..

Generally a consolidation period is good, however this is stretching out for quite a long time.  I still think we get a little more upside before some minor selling in early August.  However as I mentioned last week, I do think any pullback in the 2% to 3% range is a buy opportunity especially if Oil can turn around.  The price chart below shows how both Oil prices and Stock prices (S&P 500 index) moved up together from the low in February through June.  However Oil has corrected in July while stocks have traded sideways.  You can look at this two ways, either the oil drop will eventually pull down stocks for a little correction, or if Oil prices begin to move higher they will propel stocks upward.
We actually may see both occur, first stocks drop a little and then rebound with Oil.  No way to tell for sure but I would imagine stocks will move out of this 2 week range pretty soon.
In other news this week the Federal Reserve met and said maybe, just maybe they might hike interest rates in September.  Then today the GDP number (Gross Domestic Production) was released, which is the gauge the Fed uses to see how hot the economy is, and it was a bit below expectations at an annual rate of 1.2%.  The Fed wants to see more inflation so my guess is they will not hike real soon.  You are starting to see the stock market pick up, more help wanted signs out there and continued construction, but not quite enough activity for the Fed to put the brakes on the economy just yet.
Lastly, for many clients a little more was added toward your International allocation this week.  This fits within the allocation models as we were under-invested the past few years in that area.  Valuations overseas are a bit better than here in the States, so it was time to add a little to our holdings.

 

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