Financial Planners Ft Myers I Why earnings may not matter right now?

Every year during the middle of October we often get the start of the 3^rd quarter earnings season. This traditionally comes during the start of the 4^th quarter for the markets, which history has shown is often the best quarter for stocks. Past performance does not guarantee future results.

Normally, our markets are very interdependent on watching and reacting to the earnings reports of the big bellwether companies. The Dow for example can often experience great swings in either direction based upon how wall street interprets a company’s EPS or revenue, but more importantly the guidance that the CEO’s give for the future.

Today, our markets are reacting to headline risk out of Europe. Until the politicians and various leaders of European Union countries adapt a unified solution, the market will continue to have very little faith in a good potential outcome. With a market that is asking to be proven wrong, even the slightest sense of a unified long term solution may potentially cause the markets to respond positively.

So, even though we may be in the heart of earnings season it appears our markets here at home are going to continue to wait for additional news headlines out of Europe with baited breath.

Financial Advisor Ft Myers

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Financial Planners Ft Myers I Maybe things are not as bad as they seem?

A few weeks ago during our current investment cycle we very briefly crossed over into bear market territory. This is simply defined as a drop of 20% from peak to trough. Granted this move was very brief and looking back on it now it was probably a nice long term entry point for some of the buy and hold investors.

You must continue to remember the famous saying, “Markets can remain irrational for a lot longer than you or I can remain rational.” This is so important to focus on as continued volatility often causes extreme short term movement in both directions.

Again, the hardest part of being a long term investor in the stock market is not letting your emotions fluctuate on a short term basis. This is easier said than done because we all experience emotions naturally by the fact that we are human.

Continue to stick with your game plan and try not to pay too much attention to the financial pundits and media that all have differing opinions. After all, when fear is elevated we often see very nice moves to the upside in stocks.

Financial Advisor Ft Myers

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Financial Planners Ft Myers I Why Europe Matters for your Portfolio

Over the course of the last several months I have found myself waking up at around 3:30 A.M. Eastern Time to get an understanding on how the various European Markets are opening up. Just as we saw correlations amongst various asset classes increase during 2008 we are indeed seeing the dramatic impact of worldwide correlation again. When there is good news out of Europe our markets are more likely to open higher. Consequently, when there is pressure overseas we tend to experience pressure at home.

Europe is currently at a financial crossroads similar to the United States in 2008. In addition, the markets are currently causing Europe to experience a crisis of confidence, thus encouraging a stronger economical and political response to stem future vigilantes. The main difficulty that faces Europe is the fact that there are 17 nations that make up the European Union. This means in order to fend off a potential financial crisis and become unified as one they need to first act independently of one another. As you would expect, the markets like unified solutions in the quickest manner possible so any delays might not be interpreted with open arms.

Paying attention to the recent correlation between Europe and the United States can help you become a more educated investor in this truly global economy we are living in today.

Please remember this is for informational purposes only and to always consult with your financial advisor regarding your specific situation. Past performance does not guarantee future results.

Eric Marvin, CFP®, CRPC®-Financial Advisor

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