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February 2015 Month In Review

Intros are pretty easy from October to January. October I get to make a clever remark on Halloween, November is Thanksgiving, December marks the end of the year and all the holidays, January brings the first month of the new year as well as a lot of information about the previous one. So as February ends I struggle to find a witty remark to begin the Month in Review. So I’ll just jump into it.

If the stock market proved our theory of increased volatility this year with a January loss of 3.00% (S&P 500), it solidified it even more with a swing back of 5.75% for the short month of February! Maybe it was the fact that over 75% of the reported earnings(1) came back above expectations (well above its average). Maybe it came from the easing policies in China that reinforced its 6.5-7% growth for 2015(2). Maybe it came because energy prices seemed to hit a bottom, making way for a potential recovery in price.  Or maybe Europe is starting to see a light at the end of their rollercoaster economy with the beginning effects of QE starting to break thru.

Whatever it was, investors received it with much acceptance and appreciation. In fact this month also supported our projection that active managed portfolios would finally see their day; long overdue from the last 2 years of decreased volatility in the markets.

A much more somber note was the slightly negative to flat returns in the bond market, taking away our short-term memory loss of what happened back in early 2013 when interest rates rose sharply. It is a good reminder that while bonds were a wonderfully robust safe-haven for the last 30 years, the interest rate environment we see ourselves in today is completely different, if not completely reversed. What was a tailwind of growth for the overall bond market (mostly Treasuries, Municipals, and Investment Grade Corporates) has done a complete about-face and is creating potential headwinds this year (think 2013 returns). Especially as Federal Reserve Chairwoman, Janet Yellen, optimistically would see interest rates increased by the Fed sometime mid-Summer. This all is heavily predicated on the fact that inflation continues to increase and wages return closer to pre-recession norms (especially for the middle working class).

Now more than ever we are focused on strategically diversifying our non-equity positions to take advantage of investments with less-than-equity like risk with the potential to produce better-than-fixed-income like returns.

If you are still needing tax forms from your accounts please don’t hesitate to contact us. Many investments like non-traded REITS/BDCs, K-1 producing investments and others can take a little extra time to get to you because of their complexity. Don’t hesitate to reach out to us if you need.


As always for those of you who are clients, thank you for your trust and confidence. We continue to study the markets and the global economy to give guidance and management to the wealth you have worked so hard to create.



There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio.  Diversification does not protect against market risk.

The economic forecasts set forth in the article may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Investing involves risk, including the loss of principal.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.


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