May 2016 Newsletter to Clients
Submitted by Moneywatch Advisors on May 5th, 2016Enjoy this month’s edition that features an update on the economy, new laws aimed at protecting consumers and their retirement funds, and our updated Privacy Notice.
Economy: Just 8 weeks ago the stock markets were showing signs of weakness; oil could not find a bottom, and fear over China’s future growth potential peaked causing some investors to reduce their common stock (equity) exposure. Since then the investing environment has done a 180-degree turn-around and we have been approaching all-time highs. Once again, no reaction was the best reaction and it appears those lows provided a nice buying opportunity. This is a great example of why we avoid allowing ‘headline news’ to dictate our personal investment strategy.
| Period | Return |
|---|---|
| Jan: | -4.96% |
| Feb: | -0.13% |
| Mar: | 6.78% |
| Q1 '16: | 1.35% |
Trends we are paying attention to:
- Last week, new claims for unemployment insurance declined 6,000 to 247,000, the lowest since the 1973.
- New single-family home sales declined 1.5% in March to a 511,000 annual rate, coming in below the consensus expected pace of 520,000 but sales are up 5.4% from a year ago.
- In the past twelve months the US has run an $8.4 billion goods trade surplus with OPEC, including Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and Venezuela. Less than a decade ago, 2007-08, the US ran a $190 billion goods trade deficit with OPEC. The reason for the change in the trade balance is that the US is importing much less from OPEC, $64.8 billion in the past twelve months versus $253.4 billion at the peak in 2007-08.
- In 2015 S&P 500 earnings growth was negative for the year at -0.80% lead down by energy at -61.6%; but 6 of the 10 sectors showed year over year growth.
Fiduciary Rule: ‘Customers First’ to Become the Law in Retirement Investing… The Department of Labor is now requiring all persons who are providing financial advice regarding retirement accounts to ACT IN THE BEST INTERESTS OF THEIR CLIENTS. This is a validating change because Moneywatch was founded over 35 years ago on this same ‘idea’ which is now law. We are hopeful that it will make access to impartial advice available to even more eager savers.
Privacy Notice: Our privacy notice is available here, please do not hesitate to contact us with questions or concerns.
Thank you for your continuing confidence.
Past performance is no guarantee of future results. The opinions expressed are those of Moneywatch Advisors, Inc. and are no guarantee of the future performance of any particular fund. This information is for educational purposes only and is not intended as investment advice. Please consult your financial advisor for more detailed information or for advice regarding your individual situation.
