2nd Quarter 2015
June 30. 2015

The markets ended the 2nd quarter at almost the exact same level where the quarter started.  The S&P 500 and Dow were near their highs but the NASDAQ set a new all-time high finally eclipsing the high of the dot-com bubble during March of 2000.

The economy shrugged off a slow start from the first quarter and is expected to show modest growth of around 2% in Q2.  We fully anticipate it will continue to be a slow growth economy (2-2.5%) for the remainder of the year and into 2016.  Lower energy prices act as a tax cut and provide a stimulative effect on the economy.  The Federal Reserve has eluded to an interest rate increase later in the year which has the bond market moving in the opposite direction (downward pressure on bond prices as rates go higher).  The increase (albeit small) will be largely symbolic and has already been priced into the market.  As you might remember from a previous commentary, we believe the Federal Reserve needs to raise rates and allow natural market forces to take over instead of the zero percent interest rate environment we have had over the last 7 years.

At the portfolio level, we have been active adding a new institutional investment group called Dimensional Funds (DFA) to your accounts.  This change is a dramatic shift for us and comes after years of tracking DFA.  Their academic approach to investing utilizes scientific evidence to drive returns and remove some of the human emotion that can impede performance.  Their track record of performance speaks for itself and with low turnover/low expenses you should benefit from owning them in your portfolio.  We look forward to having most of the changes fully implemented by the end of the summer and will explain in more detail during your fall review meeting.

Over the summer months, team members will be rotating time off to spend with their friends and families.  We believe vacations are essential for emotional and physical well-being.

Thank you for your continued support and we hope you have a great summer!

Dan Michalk CFP®, ChFC

2017-05-20T19:56:39+00:00