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“It’s not whether you get knocked down, it’s whether you get up.” Vince Lombardi

Thirty months ago the S&P 500 was at 1,300…..as we all know it got knocked down hard.  Last week it once again closed above that mark.  This performance was especially relevant given its timing: falling right before Super Bowl Sunday—where stories of comebacks and rallies abound.  Coach Lombardi would have been ecstatic over the way his old team played on Sunday, just as we are ecstatic over the way equities have performed over the last 30 months and into last week.

For the week, the S&P 500 was up 2.7% to close at 1,311, the DJIA finished at 12,092 (up 2.3%) and the Nasdaq Composite Index gained 3.1% to finish at 2,769.  The Russell 2000 index, which tracks the performance of small capitalization stocks, gained 3.2% to finish at an even 800.

Apprehension surrounding events as they are unfolding in Egypt combined with a lackluster jobs report persisted to weigh on the markets; however, they were more than eclipsed by strong 4th quarter earnings announcements and encouraging economic reports.  As earnings releases continue to unfold the reports have been impressive.  Of the 60% of companies reporting, top line revenue has increased about 8% and earnings are up around 30%, further adding to a sustained economic recovery.

We are paying close attention to yields as they climb closer to the 4% range and believe that current interest rates will not derail the market gains; in fact modest increase is good news for equities.  While rising interest rates may eventually pose a challenge for stocks, we feel that the “tipping point” of 5% is still a considerable distance away.  We remain vigilant in this regard and expect any further performance to be uneven when compared to what we’ve experienced over the last five months.

With respect to “Size & Style,” we remain overweight in the small and mid cap space and favor the technology sector.  Bonds remain a concern for us as interest rates begin to move up, and we continue to explore alternative investments.

Call us for help or if you have 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. photo

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....

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