Market RE-Cap June 4, 2012
The markets had a rough month of May and opened up in June down. Most of the volatility is being brought on by Europe and its debt issues. We are also facing our own Deficit issues, a lame duck congress, and upcoming Presidential elections. All of this bring concern and have brought increased uncertainty to the markets. These are all short term problems and we need to focus on the long term.
The realty is the S&P 500 is at the same point as is it was in 2000, but the earning of those 500 companies are 1.8 times higher. Corporate balance sheets are stronger than we have seen in a long time. We are in a slow recovery, but it is a recovery. The 10 year treasury is sitting at roughly 1.6% and dividends on the stocks in the S&P 500 are roughly 2.37%. Volatility is frequent, but the VIX (volatility Index) is a modest level of 22.36, half of its level 55.18 in October 2011. Oil has continued to decline at a rapid pace which is good for business and consumers. May we saw a 10% decline from the highs this year that put us slightly negative for the year we are fundamentally stronger than we were in 2011, 2010, and 2009.
Expect to see 2 steps forward 1 step back until the elections. The best strategy as we move forward to continue to maintain your appropriate asset allocations, rebalance and keep your long term investment strategies in place.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) maybe appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Bob Doll Weekly Investment Commentary