Salutations! I hope this month’s commentary finds you and yours well and in good spirits! It is hard to believe, but we are on the downhill side of 2015, with more than half of the year behind us. So far, 2015 has provided some interesting and head-scratching price action in financial markets worldwide.
Investors appear to be concerned by the same issues that have been plaguing financial markets for months. A potential slowdown in China, Greece’s possible exit from the Euro currency, and the U.S. Federal Reserve’s first potential interest rate hike which is expected in September.
Through the close on July 30, 2015 the S&P 500 Index is up +49.73 points, or +2.42%. The Dow Jones Industrial Average over the same time period is down 77.09 points, or -0.43% year-to-date. The S&P 500 Index has outperformed the Dow Jones Industrial Average year-to-date, and is just a reminder how important it is to diversify investment portfolios.
Oil prices traded over $61 per barrel on Tuesday June 23rd, and have been moving lower overall since. As of the close of business on July 30, 2015, oil prices were trading back below $50 per barrel. Analysts believe that while the short-term price could continue to remain weak later in 2015, conversely they are expecting oil to trade in a range from $70 – $90 per barrel by the end of 2016.
At the end of July, we also received updated Gross Domestic Product (GDP) data for the 2nd Quarter which came in at a 2.3% pace. Unfortunately, the economic growth for the 2nd Quarter of 2015 was below most analysts’ expectations which were around 2.5%. While the overall economy is improving, we have not quite made it to liftoff just yet.
While we are experiencing volatility in a variety of asset classes in 2015, we remain committed to an investment approach that is focused on strong diversification, utilizing alternative, non-correlated investments, and maintaining a steady hand during periods of market stress. In forty years of business, I have experienced a variety of market conditions and I have learned that remaining calm, focusing on the economic data, and sticking to a long-term strategy works for investors.
The summer months are winding down and the One Club Golf Tournament is less than two months away. The tournament is a fun way to spend time with family and friends, while helping to support our special children in Honduras. For more information, please do not hesitate to contact our office. The summer is half over and football season is right around the corner, but as always, stay healthy, wealthy, and wise, and certainly . . . stay tuned.