Articles In 2017

DATE:            July 1, 2017

TO:                 POINT VIEW CLIENTS

FROM:           David G. Dietze, JD, CFA, CFPTM Founder and President

 

I.         First Half 2017 Performance Update

  • The S&P and the Dow experienced their best first half since 2013, since 2009 for the Nasdaq.  The bad news, perhaps, is this levitation has caused most indices to already have achieved most pundits’ full year targets.
     
    Equity markets’ outstanding performance confounded many.  Cautious outlooks were based on the coming end of the Federal Reserve’s accommodative monetary policy and weak overseas growth.  Pundits pointed to above average valuations and an aging bull market as making a correction quite probable. 
 

   MARKET DATA

 

06/30/2016

06/30/2017

Second

Quarter

2017

First

Half

2017

S&P 500 (dividends reinvested)

17.90%

3.09%

9.34%

NASDAQ (dividends reinvested)

28.31%

4.17%

14.71%

60/40 S&P 500 / TX-EXEMPT SECURITIES BLEND

10.28%

2.64%

7.02%

DOW JONES INDUSTRIALS (dividends reinvested)

21.96%

3.92%

9.29%

INTERNATIONAL STOCKS (MSCI EAFE IX ID)

20.17%

6.18%

13.86%

TAXABLE BONDS (Barclay’s 1-3 Yr Gov’t/Credit)

0.35%

0.31%

0.72%

TAX-EXEMPT SECURITIES (Barclay’s Muni Index)

-0.48%

1.96%

3.57%

  • However, the driving factors for the stampede into risk assets weren’t forecast by the bulls, either.  The bulls saw energy, infrastructure, and financials as leading the brigade, on the back of a pro-growth Trump agenda.  So far, that agenda has been stymied; pushback on healthcare reform and myriad distractions have delayed such economy friendly measures as tax reform, infrastructure spending, and regulatory reform.  
  •  Most predicted domestic markets would outpace overseas bourses, believing that the Republican agenda would provide the United States with better economic traction.  Europe was deemed particularly troubled, with the European Economic Community potentially breaking up if rightist voters prevailed with super nationalistic policies. However, France’s Macron victory proved a watershed, and economic conditions improved considerably in Europe.  International markets outperformed our own, as the Dollar weakened and signs of life in global economies exceeded expectations.
  • Technology was the first half’s sector standout.  The Nasdaq, dominated by new economy names, advanced 14% in the first half.  The FAANG stocks led, an acronym referring to Facebook (FB), Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), and Alphabet (GOOG).

  • Bond yields generally fell in Q2.  Data showed inflation slipping from the Federal Reserve’s 2% target, creating doubts as to whether the Fed would continue  increasing rates, plus the real value of interest payments became more attractive.

PREVAILING YIELDS AS OF:

 

FIXED INCOME ASSET

06/30/16

09/30/16

12/31/16

03/31/17

06/30/17

US Government 10 Yr. Note

1.49%

1.61%

2.45%

2.40%

2.30%

5-Year Certificate of Deposit

0.81%

0.81%

0.82%

0.89%

1.38%

Money Market

0.10%

0.14%

0.23%

0.11%

0.62%

 

II. Looking Forward

Concerns include hefty valuations.  There are signs that “peak central bank stimulus” has passed.  The Trump agenda lingers, and lingers.
 
However, we stay the course.  We are pursuing sectors that offer more value, like overseas, financial, healthcare, and energy.  Interest rates are likely to remain low for a long while, as evidence of inflation and overheating overseas economies is wanting.  Investors worldwide clamor for opportunities to obtain a decent return on their money.  Our mission is to spy the value first.
 

II.  ENCLOSURES

The enclosed shows the recent performance of all of your Fidelity accounts (if under management for more than 3 months and fully invested by Point View), and your investment advisory invoice. 

 

Article Index

College Parents' Packing List - Claire E. Toth, 7.25.17.

When Having Cash Causes Anxiety - John Petrides, 7.25.17.

Rollover Strategies - Donna St.Amant, 7.6.17.

Mutual Fund Illusion - Beware of What Lies Behind the Curtain - Elaine Phipps, 7.5.17.

Don't Go Too Far Over Your Skis - John Petrides, 7.5.17.

Budget Basics - Claire Toth, 6.19.17.

Why You Don't Want to Outperform This Market! - David Dietze, 6.1.17.

Has the "Great Rotation" Finally Begun? - John Petrides, 3.31.17.

Traveling Abroad for Investment Opportunities - Elaine Phipps, 3.31.17.

Allocate, Rebalance, Reduce! A Primer for a Profitable Portfolio - Donna St.Amant, 3.31.17.

Growth v. Value v. Momentum - Barbara Tomalonis, 3.31.17

Back to Basics - Your 401K - Claire Toth, 3.31.17.

Buy Bonds Now? - David Dietze, 3.15.17.

The Market Outlook Amid Record Highs! - David Dietze, 2.21.17.

10 for 2017! Investment Picks for the New Year - David G. Dietze, 1.6.17.

Your 2017 Resolutions - Claire Toth, 1.6.17.

Technology: The Go-Go Dividend Stocks - John Petrides, 1.6.17.

Closed Fund Open Mind - Donna St.Amant, 1.6.17.

Today's Bond Market - Should I Stay or Should I Go?- Elaine Phipps 1.6.17.

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