Affinity "Mark" et Minute - January 15, 2015

Affinity “Mark” et Minute – January 15, 2015

Investment Commentary – January 14, 2015

Dow – 17,613.68 (1/13/15 close) (-1.18% YTD)
S&P 500 – 2023.03 (1/13/15 close) (-1.75% YTD)
10-year Treasury – 1.89% (1/13/15 close) (-12.9% YTD)

· Despite a strong job report last Friday, wage growth which tends to have an inverse relationship with the unemployment rate declined. This surprised the market because the unemployment rate has fallen to the point where wage growth should begin to kick in. Structurally lower participation in the labor force accompanied by higher-skilled jobs should also contribute to wage growth. The decline in wages overshadowed the otherwise sunny jobs report, causing a sell-off in the market and a rally in the 10-year Treasury.

· Analysts expect market volatility in 2015 to be elevated compared to the levels witnessed from 2012-2014 given geopolitical issue and a pending interest rate hike by the Fed.

· The yield on the U.S. 30-year Treasury bond fell to a record low Wednesday and the 10 year treasury fell below the October 2014 lows to hit a full-year low today as a surprise drop in a measure of retail sales in December sparked fresh bets the Fed might not raise interest rates in 2015.

· Analysts think that U.S. growth will remain robust over the next couple of years due to increasing consumption driven by the narrowing unemployment gap and increase in disposable incomes.

· Consumer income should continue to increase on 2 fronts. First, as the employment gap closes, wages should increase. Second, the recent oil price drop acts as a tax cut for consumers with the highest propensity to spend.

· Analysts believe that broad stock market gains are probably over although less attractive valuations and near-record profit margins may limit the upside, high levels of corporate cash are expected to continue supporting U.S. stock performance via dividends, buybacks, and mergers and acquisitions.

· Analysts like Healthcare and REITS.

The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.

Disclosures:

Click to access share-market-outlook-visual-summary.pdf

http://www.pimco.com/EN/Insights/Pages/Recovery-Gaining-Momentum.aspx
https://www.jpmorganfunds.com/cm/Satellite?pagename=jpmfVanityWrapper&UserFriendlyURL=contentdet_module&smID=1158474955063

About the Author: Mark Roberts

In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution. Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies. Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.” Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.

Affinity “Mark” et Minute – January 15, 2015

Affinity “Mark” et Minute – January 15, 2015

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About the Author: Mark Roberts