Very near the end of the quarter, a triple threat of events occurred that put investors into a more conservative mode. The long awaited possible Greece removal from the Euro nations, China’s overheated market hiccupped, and a Puerto Rican default hit the headlines. We were actually pleasantly surprised market participants were not more restless.
As mentioned in greater detail in our Q 3 Newsletter, which is hot off the presses now, USA earnings, the “Mother’s Milk” of higher stock prices are expected to be very meager, if any, for 2015. With a pause in earnings growth, frothy valuations and the afore mentioned headlines, markets may continue to have a more conservative tone.
We continue to believe the Federal Open Market Committee (FOMC) will raise rates later this year. While not making headlines at the moment, this may turn out to be the bigger story for the year 2015. It has been nine years since the FOMC has raised rates, and we think the near zero rate environment has overstayed its welcome, and is doing little to help our economy at this time.
Higher rates, MAY be a headwind initially to both equity markets and fixed income, however longer term higher rates may produce a better economic environment.
Summer Doldrums and the Election
Smack in the middle of summer doldrums, many “Wall Streeters” have already headed to their favorite summer retreat, leaving greener hands in control. Combine a heavier than normal summer doldrums, along with Election headlines, we may have a few bumps over the summer. Not to worry, diversification is especially our friend during times such as these.
Have a great rest of your Summer!
John A. Kvale CFA, CFP
Enclosure (Q2 2015 Performance Report)
Who Locked the Dogs Up? Who, Who Who … Summer Doldrums?
As opposed to the 21 year old (Yikes, that was 21 years ago?) very poplar song….
“Who Let the Dogs Out” song!
Had to check to make sure the video was ok… not to worry, all safe…
Work with me here… some humor for your Friday and Weekend !!!
There once upon a time was a part of the year from Memorial Day to Labor Day that was ….. well booooring and quiet….in Capital Markets!
We have not seen that in enough years for it to be striking that it is calm…. SO FAR!
Hopefully the mention does not jinx!
Ok, so it is a short time frame…
Sure there are fireworks in certain VERY speculative parts of the market…
Maybe everyone is just ready to spread their collective wings and safely enjoy the summer?
Could Change of course at a moments notice…
If we had our wish, would just continue and let our oversized clothes be grown into via earnings of public companies…
We will be watching…..
Enjoy your Friday and talk next week!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
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Posted in Investing/Financial Planning, Market Comments
Tagged Doldrums, summer doldrums, Who Let the Dogs Out, Who Locked the Dogs Up