Volatility awakens!

Volatility Awakens: A Market Review

The beginning of the first quarter was serene and pleasurable, as equity markets levitated on the back of increasing earnings expectations and solid world economic underpinnings. But the market euphoria didn’t last long. February saw volatility awaken from its slumber with a jolt, kicking off a long-anticipated correction that reminded investors there is never a free lunch in the world of investing. As the quarter progressed and the correction intensified, investors were forced to endure an emotional roller coaster as markets swung wildly. By the end of the quarter, most developed markets had chewed through early year gains and returns fell mildly into the red.

Inside the Investment Committee 2018

Inside the Investment Committee 2018

On Saturday, March 17, 2018, Pinnacle Advisory Group’s investment team offered their thoughts on the market, outlined upcoming investment trends and wealth preservation strategies, and explained our approach to risk management. Here’s what they covered: 0:00 – Ken Solow: Volatility and Risk 20:56 – Rick Vollaro: A Time of Gradual Transition 39:08 – Sauro Locatelli:…

Climbing A Wall Of Worry

The third quarter of 2017 was highlighted by unfavorable seasonal effects and a steady stream of nerve wracking geopolitical developments, but despite a challenging environment world equity markets persistently fought off short-term jitters and closed out the quarter solidly in the green. Commodities markets also bounced back in the third quarter, and fixed income found a way to post positive returns as investors continued to demonstrate an appetite for both credit related yield and safe-haven plays to hedge portfolio risks.

Those who stayed invested during the third quarter were amply rewarded for doing so, but as markets climbed higher the risks of an overvalued market rose in tandem. With the fourth quarter looming, investors must decide if they should remain fully invested, or start to pull back after the unusually strong run this year.

Gameplan For A Market Hangover

The first quarter picked up where the fourth quarter left off, with equity markets celebrating the surprise of a new U.S. administration that global investors perceived to be more business friendly than the previous one. During the quarter, stocks rallied around the world and along with a pullback in the U.S. dollar and signs that global growth was slowly reviving, many international stocks enjoyed gains in excess of the U.S. While the stock market roared, the bond and commodity markets were less enthused, as bonds bounced and commodities gave back some of the gains that accrued towards the end of the year. By the end of the quarter the equity markets were mostly calm, but with tensions that were beginning to build and signal that some of the election-driven luster was beginning to wear off.

Hangovers & Roadmaps

2016 began with a thud and ended with a bang. After one of the worst-ever starts to a year, U.S. stocks managed to rebound and ultimately finish the year with solid gains. Much of the rise came in the final few weeks of the year, following the surprising results of the U.S. presidential election. Indeed, there has been an abrupt change in market sentiment, and asset prices have largely taken their cues from a recalibration of economic expectations in the wake of the surprising Trump victory and Republican sweep of Congress.

Moving to a Negative Interest Rate

With the Federal Reserve recently raising interest rates for the first time in many years, the U.S. economy may be at the beginning of a transition away from the ultra-accommodative monetary policy environment that has existed since the global financial crisis. However, central banks in other major developed economies are not following suit—in fact, they are still trying to counteract the current low growth, low inflation economic environment.