“Off The Wall” Blog
Unique, straight-forward, unfiltered opinion on topics of concern for individuals with newfound wealth.
“From the Halls of Montezuma to the Shores of Tripoli”-unknown author, the Marines’ Hymn
By David B. Armstrong, CFA | Feb 22, 2011 | Weekly Market Commentary
U.S. stocks continued their rally as Muammar Gaddafi attempted to squash opposition groups’ protests in Libya and other protests continued to erupt across the Middle East. We wonder what Lieutenant Presley O’Bannon would think of all this commotion in Libya.
With the S&P 500 now up over 98% off of the March 2009 intraday low, we have witnessed an essential ‘double’ in the S&P 500 in just over 700 days. According to Barron’s over the weekend – that’s a record.
We’ll take the bad news alongside a good market as a nice change of pace, but we are begging Gaddafi, with all this press, not to bring back that awful blue tracksuit he loved so much back in the ‘80’s.
The equity markets we track were all up last week with the Dow Jones Industrial Average (DJIA) logging positive gains for 11 out of the past 12 weeks. The DJIA gained 0.96% to finish at 12,391, the S&P 500 Index gained 1.04% to finish at 1,343 and the Nasdaq Composite Index gained 0.87% to finish at 2,834. The Russell 2000 index, which tracks the performance of small capitalization stocks, gained 1.55% to finish at 835.
There are only 5 trading days left in this month (including today, 2/22), and the broad averages have only had 3 down days for February. We’ll see how that ends up, but I remember February of 2009 like it was yesterday and we are a log way off from that. Energy is benefitting from the higher oil price stemming from the turmoil in the middle east, while materials suffered a little bit last week on indications that China was slowing a little bit.
This week’s economic data will probably take a major backseat to the news coming out of Libya and other Middle Eastern countries. At the forefront of everyone’s mind: that oil has shot back up given the fact that Libya is an oil rich nation and there are a few Iranian warships heading to the coast of Israel for some training. With earnings season basically complete, we don’t think that this week’s news on manufacturing and housing will be anything good enough to displace the effects that current events will have on the markets.
Regardless, we don’t think that the news is ever something that warrants making changes to a solid investment strategy. Unless an investor has experienced a marked change in cash flow or a need for liquidity, we think maintaining a long-term exposure to equities is advisable.
We are still over-weight the small and mid cap space and the technology sector. We are still looking at investments in areas OTHER THAN bonds for fixed income allocations.
Call us for help or if you have any questions.
Securities and Financial Planning offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC
**Standard Compliance Disclosures
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) may be 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 cannot be invested into directly. Stock investing involves risk including loss of principal. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries, and widely held by individuals and institutional investors. The Standard & Poor’s 500 Stock Index (S&P 500) is an unmanaged capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The NASDAQ Composite Index measures all domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. The market value, the last sale price multiplied by total shares outstanding, is calculated throughout the trading day, and is related to the total value of the Index. The Russell 2000 Small Stock Index is an unmanaged index generally representative of the 2000 smallest companies in the Russell 3000 Index. The Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.
David B. Armstrong, CFA
President & Co-Founder
Dave got into the industry when he discovered his passion for finance in his mid-20’s. He’s a combat veteran and served as an officer in the United States Marines Corps on both active duty and in the reserves, retiring at the rank of Lieutenant Colonel. While serving on active duty, Dave was unable to spend money on deployments, so he became a self-taught investor. Along with a few bucks cash as a bouncer, his investing performance grew to be good....
Stay up to date!
Subscribe to our “Off the Wall” Blog for articles and videos on all things wealth management, by all members of our Team. Unlike Facebook, we will never share your data with anyone.