The Markets:

Two Months Later  

A couple of months ago I wrote that I believed the markets were poised for a pullback. It turns out that I was about a month early. Since late March, the S&P 500 is down about 7%, and I believe that there is still potentially more room for loss. The main reason for my pessimism is uncertainty.

The one thing that the markets seem to dislike the most is uncertainty. According to recent polls, we don't have a clear leader in the race for President. Knowing who may run the country will give the markets an idea of future policies. The direction could be less regulation or more. It could also mean lower or higher taxes. Not knowing the course of the future puts the market in flux. Until we have a clearer picture of who may become President, we may continue to see volatility in the markets.

Greece continues to be another area of uncertainty for the markets. Last year we seemed concerned about whether or not Greece would default on its bonds, while this year the concern seems to be around whether or not Greece will leave the European Union after defaulting on its bonds.

It could be that we see a similar market pattern this year as we have the past two years. The market has a great winter only to see a decline in late spring and summer followed by an upswing in the fall. Hopefully that will ring true again for 2012. I believe that markets will likely turn around after we have some certainty around who will become President (barring a catastrophic event).

I have been suggesting to many of my clients that they begin taking a portion of their money out of stock investments and move to cash or bonds.  If you're wondering what makes sense for your portfolio, I suggest that you contact your financial advisor.  I'm also happy to meet with you for a portfolio review to discuss your specific needs.

This article is for informational purposes only and is not intended to provide specific advice to any individual. Consult your legal, tax, and/or financial advisor to determine what is appropriate for your situation. Indexes are unmanaged and investors are not able to invest directly into any index. Past performance is no guarantee of future results.

Office Closings ...  

The office will be closed on June 14th and 15th.  While the office will be closed, Woody will continue to be available by phone and email.

Just a reminder ...

We are always accepting donations for the local animal shelters - toys, tennis balls, collars, leashes, food, cat litter, cardboard trays, office supplies, cleaning supplies, towels, mats, washcloths, etc. We will accept donations Monday-Friday between 8:30am & 4:30pm.