For investors, the first few weeks of January have been a lot of things, but “happy” has not been one of them. With the U.S. stock market suffering its largest one week drop in history, the new year has gotten off to a very rough start.
There are a number of things that are weighing on investors’ minds. The conflicts in the Middle East, terrorism, plummeting oil prices, rising interest rates, and a potential global slowdown–just to name a few. These concerns have caused fear to rip through the markets and there has been no escape from the plummeting prices in stocks. The potential positive effect of these pullbacks is better pricing. If you have cash on the sideline, it presents an opportunity to buy some great companies at lower prices and higher yields.
We had already moved our portfolios into a more defensive position during the last quarter of 2015 and raised some cash. Although we found ourselves in a better position than some, we were not spared from the sell-off.
Going forward, we will continue to favor consumer retail due to low gas prices, and we will continue to seek out stocks with good dividend yields. Our model portfolios remain overweight with bonds and will stay that way until price earnings ratios get in line with GDP and economic growth.
Market volatility has always invoked a certain amount of fear in investors, but has rarely been cause to liquidate portfolios. We urge you to continue following your investment plan. If you have had any changes to your financial situation or long term goals, please contact us to set up an appointment to discuss. It is always a good idea to meet annually to revisit your goals and risk tolerance.
Hosler Lee Wall, CPA/PFS, CFP
Wall Titus, LLC
The opinions expressed herein are solely those of Wall Advisors, Inc. as of the date posted and are subject to change without notice based on market conditions and economic changes. This commentary is for educational purposes only and should not serve as financial advice or an offer to sell any product. None of the statements herein constitute a solicitation recommendation or an offer to buy, sell or hold any securities, other investments or to adopt any investment strategy or strategies. Past performance is not indicative of future results. These opinions do not guarantee any specific outcomes or returns and do not supercede personalized recommendations from your financial advisor. This material may not be suitable for your personal financial situation and investment objectives. Consultation with your financial advisor for specific strategies appropriate for your goals is recommended.
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