THE MARKETS
"Uncertainty" is an overused, but appropriate word to describe the situation our country finds itself in.
- We have uncertainty in Washington about how our budget issue will get resolved.
- We have uncertainty about the economy as it hasn't fully recovered from the Great Recession.
- We have uncertainty about the value of the dollar as gold prices hit record highs and the dollar remains depressed.
- We have uncertainty about how the war on terrorism will progress.
- We have uncertainty about when the housing market will recover.
Yet, when you think about it, uncertainty is actually the norm. For example, in the past 100 years, we've had two World Wars, several regional wars, a Cold War, a Great Depression, a presidential assassination, a bitter battle over Civil Rights, rampant inflation, and other scary events.
History shows that uncertainty is a fact of life. History also shows that Americans find a way to deal with it and overcome it.
As financial advisors, we can't "control" or "fix" uncertainty. We can, however, account for it. We realize that every investing decision carries with it a certain degree of risk or uncertainty. Knowing that, we do the best job we can to "account" for what could go wrong.
We try to make decisions that consider the best case and worst case scenario. We try to find investments that help balance each other so a possible decline in one investment might be offset by a possible rise in another. We try to look at the big picture and make investments that are commensurate with the risks our clients are willing to incur.
Because of uncertainty, we won't always be right. However, because of our awareness of uncertainty, we're always looking for ways to help protect the downside while leaving room for potential upside profit.
Data as of 7/29/11 |
1-Week |
Y-T-D |
1-Year |
3-Year |
5-Year |
10-Year |
|
Standard & Poor's 500 (Domestic Stocks) |
-3.9% |
2.8% |
17.3% |
0.8% |
0.2% |
0.7% |
|
DJ Global ex US (Foreign Stocks) |
-2.1 |
0.6 |
14.8 |
-0.7 |
1.1 |
5.9 |
|
10-year Treasury Note (Yield Only) |
2.8 |
N/A |
3.0 |
4.0 |
5.0 |
5.1 |
|
Gold (per ounce) |
1.7 |
15.5 |
40.1 |
21.1 |
20.8 |
19.9 |
|
DJ-UBS Commodity Index |
-1.5 |
0.3 |
23.5 |
-7.1 |
-1.8 |
4.7 |
|
DJ Equity All REIT TR Index |
-3.7 |
11.0 |
23.4 |
3.8 |
2.1 |
11.1 |
Notes: S&P 500, DJ Global ex US, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron's, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable or not available.
