Quick Comment – Challenging Start to the Markets for 2016

The markets are demonstrating significant turbulence to start 2016, led lower by overseas markets and a continued rout in commodity prices.  Concerns over economic growth, the future of Fed stimulus, currency devaluations by China, as well as geopolitical concerns have all contributed to market weakness.  It’s been a perfect storm to start the New Year.

The good news is that our risk-managed portfolios don’t have any significant exposure to the overseas emerging markets that have borne the brunt of the market fall (mainly China).  Trends in emerging markets have been weak for some time, so we’ve not been invested in this area for several months.  But our exposure to the U.S. markets has caused some deterioration, although not as bad as the overall indexes.  Our position in U.S. real estate has been showing good support, although it too has been somewhat volatile.

For our retired clients who are withdrawing cash for monthly living expenses, we have been proactively raising cash to help ensure that all future withdrawals for the extended future are easily covered.  This includes having sold our high-yielding bond position (JNK) several months ago as well as our convertible bond index (CWB) earlier in the week.

clearTREND® is prescribing additional defensive measures over the next several days that will help to minimize risk going forward.  We will of course continue to execute our investment management plan to equally balance both the potential rewards of investing with the risks of investing.

It is important to note that a protracted market downturn could be significantly helpful to all of our clients in the long run, so long as we minimize our participation along the way.  Long-term capital appreciation in an overall flat market environment is really only possible with this kind of market volatility and protracted market downturns which we can hopefully take advantage of when markets do eventually turn upwards.

More to come shortly, but please feel free to reach out with any questions or concerns in the meantime.

THIS MARKET AND PORTFOLIO COMMENTARY CONTAINS FORWARD-LOOKING STATEMENTS.  APPLETON GROUP MANAGED PORTFOLIOS HAVE NO FINANCIAL INSTITUTION GUARANTEE, ARE NOT FDIC INSURED AND MAY LOSE VALUE.
By | 2016-11-15T11:27:09+00:00 January 7th, 2016|Advisor, Client, Quick Comment|Comments Off on Quick Comment – Challenging Start to the Markets for 2016

About the Author:

Mark’s commitment to objective, independent wealth management led him to establish The Appleton Group LLC in April of 2002. With over 19 years of experience in the financial services industry, Mark serves as portfolio manager for our private client group, and co-manages all assets held in our suite of portfolio offerings. His responsibilities include risk analysis, asset allocation, market research, and institutional client development. Mark also serves as both Principal and CEO of The Appleton Group LLC. He earned his Accredited Investment Fiduciary (AIF) designation in 2016