And They’re Off To The Races
The Kentucky Derby is always a huge fan fair. The horses are loaded into the gates “And They’re Off!” All the while analysts debate the fan favorite as well as the potential underdog who might end up in the winner’s circle. The spectators in the stands have placed their bets and watch with anticipation not knowing who the victor might be – and then the rhythm, the intensity… So similar is the sentiment of investors regarding the stock market. We started the year with the market not skipping a beat. In fact, the theme of volatility, tremendous market movement, was in full effect long before most were back from the holiday break.
In addition, the last quarter bought quite a few headlines, which fed flames of volatility. The Swiss National Bank removed the foreign exchange cap against the Euro, debt issues surrounding Greece came to light again, oil prices continued to tumble, concerns regarding Iran’s nuclear capabilities reemerged and Euro almost reached parity with the US Dollar. These headlines, along with many others, jolted the market during the quarter. It seems whether the market is going up or down, the volatility race is in full steam.
After all that initial momentum, the US stock market bulls ended the quarter on a relatively lackluster note. The Dow industrials ended down .26% at 17,776.12, the S&P 500 eked out a minor gain of .44% ending at 2,066.89 and the international markets as measured by the MSCI EAFE ending up 4.19% at 1,849.34. One interesting note regarding the Dow’s performance, this was the first negative quarter we’ve seen for the index in roughly 2 years.
Patience a Virtue?
We have all heard the adage of patience being a virtue, which is arguably true for long-term investors. However, more recently, the Federal Reserve has decided to remove this righteous characteristic from their written repertoire. This may be in an effort to shift investors’ focus from the language of the Fed to the language of the markets—in other words, market data.
As in years past, investors would look to market data as the main driver behind the potential moves from the Fed. This started to change several years ago when Ben Bernanke’s Fed would offer guidance post the release of the meeting minutes, in an effort to provide additional clarity to the markets. Well, we’ve been living on the words of the Fed for some time now, to the point where it feels like the Bon Jovi song, Living on a Prayer, a prayer that the Fed will say the words to spur a rally and even higher highs in the markets. Only time will tell, but we’ll see if Mrs. Yellen’s efforts to shift investor behavior will be successful.
What’s Inspiring You?
Over the years we have gotten to know our clients’ financially speaking but we would like to know what inspires you. Do you run in marathons, bike ride for a cause, or do you or your kids play in a local league? Given our focus to support your goals and the community, please be sure to share with us what you are doing, and we will do what we can to support your passion. We want to make a difference in the lives we serve and we believe this starts with you.
Newsworthy, Noteworthy
We will soon be launching a webpage dedicated to financial literacy. This Knowledge Base page will include educational videos, some of which hosted by Archvest’s own, as well as posts of our favorite apps for your smart device. We will be sure to announce the launch of this webpage and we welcome your feedback and suggestions as we continue to build out the page.
In addition, we recently did some on-site filming for a show that may air on local television within the next couple of months. We will be posting these videos to our website for viewing once available. Lastly, we have embraced the social media platform and now have a company Google+, Facebook, LinkedIn page and Twitter account. Please look us up, like us and follow us as we post useful financial planning tips and investment articles of interest.
One final note regarding your tax returns, please connect with us if you have any questions regarding the 1099s issued from your investment account custodian. We are happy to offer a double check of the investment transactions in addition to your overall tax return.
We thank you for your continued support and the confidence you have placed in our firm.
Eric Lai & John Wenzel | Archvest Wealth Advisors