Archive for category: Commentary

As we mentioned in the last newsletter, an unsurprising correction (a 10% drop in the S&P 500 from its 2012 highs) occurred in the second quarter. The main causes of the pullback were increasing evidence of slower global economic growth and sovereign debt concerns spreading to Spain and Italy with 15 Spanish banks downgraded recently by Moody’s. Elections in France and Greece highlighted the political discord in Europe and the conflict on how to address the debt crisis – austerity and/or tax increases…

As we enter a new year, we thank you for your patience through these difficult times. We are a few years into the post-crash recovery.  While it is a tepid recovery at best, this low degree makes some sense.  Through debt, our country and several others have tested and explored the limitations of leverage and the accompanying foolish products and practices that supported the markets’ latest mutual hallucination.  In borrowing from future generations, and by bringing that prosperity into the present, we owe some repayment – and a low growth world for some time would be a lucky result…

We recommend staying committed to your long-term strategy and if appropriate gradually increasing your equity allocation.  If the market pulls back further from these levels, we would accelerate the process in a disciplined manner…

Markets rarely make tops in times of negativity but in times of euphoria…

We believe this is an opportunity to own stocks at levels that have not been seen since the early 1980’s and any market dip should be used as a buying opportunity…