Financial Planners Fort Myers— Federal Reserve Day

About eight times a year the Federal Reserve gets together and discusses the economy, inflation, interest rates, and everything else that may cause financial markets around the world to react.  Today, they basically repeated their view from the last meeting that the economy faces significant downside risks.  However, they failed to give investors any indication of whether or not it was close to unveiling another round of bond buying to stimulate the economy even further.  One piece of news that was different from last time was the fact that they mentioned late 2014 as a potential time that they may hike interest rates.  This was pushed back from the middle of 2013 that they previously had told us.  Also, the Federal Reserve gave us an official inflation target of 2% for the first time ever in a move to move towards greater transparency.

The markets appear to like the announcement as they have moved higher on the session coming well off the lows of the morning.  Past performance is no guarantee of future results.

Eric Marvin, CFP®, CRPC®

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Financial Planners Fort Myers— Potential Pullback?

With the S&P 500 closing higher for five straight days in a row markets may look to take a short-term breather as we continue to delve into earnings season.  Yesterday was a fairly non- eventful day in terms of price action as the market waited for further developments out of Europe to take shape.  As we have seen in the past, when we are waiting for something it generally doesn’t happen.  Investors should take solace in the fact that tomorrow is a Federal Reserve announcement day and history has shown us that they tend to be more bullish than bearish.

As a reminder the S&P 500 is an unmanaged index.  Investors cannot invest directly in an index.

Past performance is no guarantee of future results.

Eric Marvin, CFP®, CRPC®

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Financial Planners Fort Myers— What a start to the Year!

January has been very kind to some investors so far this year as the S&P 500 is up over 4.5% just this month.  As I mentioned last week, when the first five days in January are positive the chances for a profitable year have historically been around 75%.  (Remember, past performance is no guarantee of future results.)  In addition, the average gains have tended to be quite impressive as well.  It is amazing to me how quickly the global markets can change from trading on macro headlines to going straight back to reacting to fundamentals.  Last month, we would have all been on pins and needles waiting for a resolution to the Greek debt debacle.  Now, it barely gets five minutes of air time on television!

In my opinion the market is changing from a mean reversion market to a trending market.  The recent news out of Greece and the lack of panic out of Europe have caused some investors to focus on fundamentals again, thus going back to individual stock analysis and leading to lower overall correlations.

Stay safe out there and remember to consult with a financial professional should you have questions or need help.

As a reminder the S&P 500 is an unmanaged index.  Investors cannot invest directly in an index.

Eric Marvin, CFP®, CRPC®

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Financial Planners Fort Myers— Another Solid European Debt Auction

Eric Marvin, CFP®

As investors awoke this morning they were greeted by another solid debt auction in Europe.  This time it was Spain auctioning off $4.88 billion euros of 12 and 18 month treasury bills.  However, Thursday will prove to be an even bigger test as maturities of up to 10 years will be auctioned off. 

As things stand right now the S&P 500 is approaching the 1300 mark for the first time since last year.  It will be important for investors to keep an eye on this level as it is a key psychological milestone in this continued uptrend.

As a reminder the S&P 500 is an unmanaged index.  Investors cannot invest directly in an index.

Past performance is no guarantee of future results.

Eric Marvin, CFP®, CRPC®

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Financial Planners Fort Myers— Bulk Foreclosures for the Banks

A pilot program to sell government owned foreclosures in mass quantities could be in the works from the Obama administration.  With more than 250,000 properties on the books of Fannie Mae, Freddie Mac, and the Federal Housing Administration the federal government is getting anxious about what to do with all of the homes.  One idea could be to sell off blocks of properties to private investors who would in turn rent them out to those in need of housing. 

This drastic action could cause the major banks in the United States to write off up to 50% more properties than they already have put into foreclosure.  While the banks may take a hit upfront, this kind of program would have the potential to help start a recovery in the housing sector, which would in turn have benefits for the economy as a whole.

Eric Marvin, CFP®, CRPC®

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Financial Planners Fort Myers— New 50 Day High for the S&P 500

Eric Marvin, CFP®

The S&P 500 closed yesterday at 1292.08, which was significant because we established a new 50-day high water mark and also took out the highs from last October.  With this in mind, keep an eye on the markets today as we will have the Federal Reserve Beige Book out this afternoon, which could give us an indication of their thought process on the economy.

Past performance is no guarantee of future results.  The S&P 500 is an unmanaged index.  Investors cannot invest directly in an index.

Eric Marvin, CFP®, CRPC®

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Financial Planners Fort Myers— The First Five Trading Days of January

Many investors may be familiar with the Stock Trader’s Almanac published by Jeffrey and Yale Hirsch.  This is a great book put out every year to give investors and traders all sorts of comprehensive data to evaluate on an ongoing basis.  One of the studies that this father and son duo puts out tends to get a lot of attention in January because it focuses on the first five trading days of the year.  The concept is very simple in that the performance of the S&P 500 during the first five trading days can be a leading indicator for the rest of the year.  The data goes back to 1950 all the way through the end of 2011 and the results speak for themselves.  Amazingly, the last 38 up first five days of the year for the S&P 500 have resulted in gains 33 times for the remainder of the year. 

Past performance is no guarantee of future results.  The S&P 500 is an unmanaged index.  Investors cannot invest directly in an index.

Eric Marvin, CFP®, CRPC®