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.
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:…
After a solid third quarter, investors began to wonder just how long the market could run without a healthy pullback. But those bracing for a market correction got caught flat footed as markets found a way to keep powering ahead in the fourth quarter. Domestic equity markets surged in anticipation of tax relief, emerging markets…
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.
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.
We are pleased to present a recording of “Roadmaps and Hangovers,” our 2017 Inside the Investment Committee event, which gave attendees an inside look at the thoughts, views, and strategies of our investment team.
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.
Pinnacle’s Chief Investment Officer Rick Vollaro looks at the market in the month since the election and explains how we’re positioning our portfolios in response.
The third quarter was a fairly placid one for investors, though there was major diversity in return profiles depending on what asset class, sector, or country one was invested in. In the U.S., the leading sector was clearly technology stocks, while elsewhere, Japan, Emerging Markets, and European stocks also had positive returns for the quarter. Within fixed income, the broad bond market indices slowed down and posted flat returns, though credit related sectors performed well along with other risk assets. Commodities brought up the rear in the third quarter, as they cooled off from their torrid run in the first half of the year. Summing it up, returns by asset class were mixed, but most investors in globally diversified portfolios enjoyed modest gains during the period.
With the third quarter in the books, the focus now turns to assessing prospects for the fourth quarter and beyond.
After a tumultuous first quarter, the second quarter brought some relief as most assets were able to rebound to varying degrees. From a big picture perspective, U.S. stocks have been oscillating in a wide range that dates back to the fourth quarter of 2014. In other words, for the last year and a half, stocks have made almost no upside progress, while being subjected to several brief but vicious selloffs. This type of choppy, sideways action is frustrating for both bulls and bears as long as stocks remain within the current range. Global stocks are in a much more precarious state, with only modest recoveries that left many markets still well below their highs of a year ago (or longer).