Weekly Commentary, 8/8/16 – 8/12/16
U.S. equites finished the week up slightly as the S&P 500, Dow Jones and the NASDAQ Composite hit a trifecta Thursday, all closing at record highs. The last time the three closed simultaneously at record levels was December 31, 1999 at the height of the dot com bubble.
In a relatively quiet summer week, some of the most important headlines were generated from the Organization of the Petroleum Exporting Countries (OPEC). Oil prices gyrated through the week as rumors circulated that OPEC member countries would hold talks next month to discuss a coordinated production cap. The price for WTI light crude oil closed the week almost 6% higher.
Stocks continue to benefit from easy-money policies from global central banks resulting in bond yields hitting record lows around the world coupled with earnings data that hasn’t been as bad as feared.
Technically speaking the market remains in solid shape, helping support equity prices as we trundle through the dog days of summer. The next major event that could potentially impact the markets could be the annual Jackson Hole Summit, August 25-27, sponsored by the Federal Reserve Bank of Kansas City, which hosts central bankers and policy makers from around the world.
Market commentators and investments strategists have been busy comparing the current trifecta to that of 1999 and the end of the dot com bubble. There are many similarities to 1999, but of course many differences as well. We won’t pretend that we can forecast which direction the market will take next, but we believe the Stadion tactical portfolios are appropriately positioned for the current levels of market risk. We will continue to follow our systematic processes and make allocation changes when warranted.
The Stadion Managed Accounts risk objectives are managed using a “core/satellite (Flex)” approach. The core positions will comprise 40-60% of the portfolio and are invested in equity, fixed income and money market instruments with the strategic allocation becoming more risk averse as the risk tolerance of each fund changes. In allocating the objective’s Flex assets (the remaining 40-60% of each portfolio), Stadion uses a proprietary, rules-based weight-of-the-evidence model. The portfolios are overweight their respective benchmark equity allocation at this time.
Past performance is no guarantee of future results. Investments are subject to risk, and any of Stadion’s investment strategies may lose money. The investment strategies presented are not appropriate for every investor and financial advisors should review the terms and conditions and risks involved. Stadion’s actively managed portfolios may underperform during bull markets. Some information contained herein was prepared by or obtained from sources that Stadion believes to be reliable. There is no assurance that any of the target prices or other forward-looking statements mentioned will be attained. Any market prices are only indications of market values and are subject to change. The S&P 500 Index is the Standard & Poor’s Composite Index of 500 stocks and is a widely recognized, unmanaged index of common stock price. The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The NASDAQ Composite is a stock market index of the common stocks and similar securities listed on the NASDAQ stock market and it is highly followed in the U.S. as an indicator of the performance of stocks of technology companies and growth companies. It is not possible to invest directly in indexes (like the S&P 500) which are unmanaged and do not incur fees and charges. The Sharpe ratio measures the excess return per unit of deviation, or risk. Any references to specific securities or market indexes are for informational purposes only. They are not intended as specific investment advice and should not be relied on for making investment decisions.
Past Performance is no guarantee of future results. Investments are subject to risk, and any of Stadion's investment strategies may lose money.