The British voted on whether they should stay in the European Union (EU), it's being called Brexit combining the word British and exit. The arguments for exiting were the high cost to United Kingdom (UK) paying into the EU, and the toll of immigration. The supporters to stay were in favor of the stability and the benefits of trade/labor that EU offers.
While the market had a temporary rally until the Brexit news, the markets are not making much headway for the year. The S&P 500 is down for the year at -2.26% (06/28/16)*, while foreign developed markets MSCI EAFE is negative -9.57% (06/28/16)**.
Above is a year-to-date chart on EFA, EEM, SPY. These ETFs represent the MSCI EAFE index, MSCI Emerging Markets Index, & S&P 500. The return represents changes in price does not include dividends.***
The U.S. economy is healthy but it looks like the market might be overvalued. Corporate earnings have slowed a bit through 2015, and some analysts have warned of a recession. While JP Morgan predicts a pickup in earnings for 2016 that is yet to be determined.
Above is a slide from JP Morgan's Guide to the Markets 2016 Q2 edition.****
That being said I like to caution investors to stay patient. Markets are unpredictable and recessions are part of the economic cycle. Some of the best opportunities for stock market gains come after a recession. While the returns for the market in the last two and half years have been relatively flat that is not a reason to abandon long term investment goals. I remind clients that 2000-2002 were three years of poor market returns before a robust 2003. Stay patient and remember over the long haul equities perform!
A final thought to leave with you is this great article about long term trends in the market. The news can scare us and a couple years of lackluster returns can make us grow impatient, however I encourage you to read this article and have confidence in your long term plan!
You can view your performance reports from Albridge at www.mainaccount.com/ifg. D
1. Past performance is not indicative of future results.
2. Historical performance is no guarantee of future performance.
3. Diversification does not guarantee profit nor is it guaranteed to protect assets.
Remember financial markets go up and down, stay the course and you'll do fine!
Ty Peterson | O: 720-466-3515 | D: 720-722-3505 | F: 720-398-3504
Financial Advisor | KINDRED FINANCIAL 44 Cook St Suite 100, Denver, Co 80206
Registered Representative offering securities and advisory services through Independent Financial Group, LLC (IFG), a registered broker-dealer and investment advisor. Member FINRA/SIPC. Kindred Financial and IFG are unaffiliated entities. OSJ Branch: 12671 High Bluff Dr. Suite 200 San Diego, CA 92130
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