WOW- What a week!

By David B. Armstrong, CFA | Mar 21, 2011 | Weekly Market Commentary

Be sure to see our U.S. News and World Report column from last Friday found here.

Last week was a hard one to watch as the Dow Jones Industrial Average (DJIA) tumbled for the first three trading days- falling a collective 431 points before recovering about 245 points on Thursday and Friday.

Global Yen intervention, Fed approved increases in bank dividends and stabilization in oil prices helped stocks recover at the end of the week.  After 2 full years of a bull market / economic recovery, we think that the market will be prone to overreact when things are not all sunshine and rainbows.

The equity markets we track were all down again last week.  The Dow Jones Industrial Average (DJIA) lost -1.54% to finish at 11,859, the S&P 500 Index lost -1.92% to finish at 1,279 and the Nasdaq Composite Index lost -2.65% to finish at 2,644.  The Russell 2000 index, which tracks the performance of small capitalization stocks, lost -1.02% to finish at 795.  All sectors except Basic Materials and Oil & Gas were down as well.

Right now investors need to be sticking to their financial plans more than ever.  This is not a time for indiscriminate selling based on fear and/or any assumed outcome to any of the world events.  Unless your current liquidity situation has changed based on the loss of an asset that provides cash-flow for daily needs, there is no need to “take profits” or “sell on fear”.

Investors that have un-invested cash may find that this is a good time to take advantage of opportunities in the equity markets so long as any buying is well within the context of a financial plan and does not change the risk parameters of their long-term strategy.

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.

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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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