I would like to start by wishing you a Happy New Year. The markets and headlines are providing the expected volatility that makes anyone watching wonder if we are going to see a repeat of the 2008/2009 financial crisis. None of us know for sure, but I doubt it. However and understandably, it can be worrisome to watch the daily gyrations of worldwide news events. I thought I would share an article from a longtime friend Nick Murray.
The last several days in the stock market have been the types of days that make headlines. As we are writing this on Wednesday morning, it appears that today will be similar. On Friday, the overall U.S. indices moved lower by about 3% with the Dow Jones Industrial Average down 530 points. Monday was more of the same as the news of China’s slowdown and energy concerns accelerated.
We have written at some length regarding the importance of volatility to increasing returns for the patient and goal-focused investor. On Thursday, January 22nd, the S&P 500 Index surged 1.5%, moving 1.9% intraday from its lowest to highest, marking the 15th consecutive day with 1% or more intraday point moves.
Starbucks is offering an organic Reese’s Cup. They have rebranded the iconic Reese’s brand to Justin’s and packaged this delightful treat as “organic.” Just when I thought I had witnessed most of the world’s absurdity, I am humbled again. Folks, have you noticed that the pace of absurdity is not moderating?
This communication is delivered the week following an active period of political, economic and social unrest headlined by the focus on the Middle East and the ongoing emergence of the Islamic State or ISIS. The markets were down for the week which has been rare this year. Here is our perspective.
As the 2014 Winter Olympics comes to a close, I am reminded of the “Miracle on Ice” in 1980 when the US Men’s hockey team upset the heavily favored Soviet Union team. While not as political, or as extensively covered by the media, we defeated them again last Saturday. This time we did it without the element of surprise.
Last week the world watched the Seattle Seahawks defeat the Denver Broncos in the Super Bowl. It was a surprising outcome given the talented Broncos lead by fan favorite quarterback Peyton Manning. It was curious that the speculators in Vegas had the Broncos favored to win the game. This time, the speculators were wrong and not by a small margin. The Seahawks won by five touchdowns.
As 2013 winds to a close we are busy getting ready for 2014. There are two important things that we work on during November and December to make sure client portfolios are in the best position possible.