The volatility we saw in the 4th quarter of 2014 continued throughout the first quarter of 2015. The primary driver of the volatility was an increased expectation amongst economists that the U.S. Federal Reserve would raise interest rates as early as June. A second factor was sub-par earnings reports that produced a perceived slowdown in US production.
For the quarter, the S&P 500 squeezed out a slight gain of less than one percent. Conversely, the international markets (EAFE Index) produced a gain of over 5%. The shift signaled a belief that the similar European and Japanese monetary policies, which helped US markets for the last few years, are beginning to have the same positive effects across seas. Continue reading “April 2015 Commentary”
The 4th quarter of 2014 has been considerably more volatile than those of the past few years, as we have seen a see saw effect on a swell of global economic data and events. The quarter thus far has seen the S&P 500 fluctuate up and down by 5% or more a number of times. Continue reading “December Commentary”
The 2nd quarter of 2014 was full of milestones and momentum as the “sell in May” theorists were again on the wrong side. We saw the quarter end with a gain of over 4% in the S&P 500 with all-time highs eclipsed on multiple occasions throughout the quarter. It seems almost inevitable that 2014 will see S&P 2000. Continue reading “July 2014 Market Commentary”
Vavra Capital Management is pleased to announce the opening of it’s first separately managed account product. The strategy aims to outperform a 60/40 weighting of the Wilshire 5000 Stock Index and Lehman Aggregate Bond Index utilizing a portfolio of exchange traded funds (ETFs) while maintaining a similar risk level. The VCM Balanced ETF Strategy will be available directly through Vavra Capital or through any advisor on TD Ameritrade, Schwab, Fidelity or Pershing’s institutional managed accounts platform. For more information, please contact Vavra Capital directly at firstname.lastname@example.org or (610) 489-3018.
Our June commentary happened to be timely and fortuitous when I suggested the 5% pullback in the US markets sparked by the Federal Reserve hinting of a bond buying taper was “unwarranted” and an “overreaction” and would be “short-lived” and create a “buying opportunity”. Since then the S&P 500 has risen almost 13% to an all-time high of around 1800. Continue reading “November 2013 Commentary”
The Federal Reserve meeting on Wednesday and Chairman Ben Bernanke’s comments about tapering the bond buying program created a two day sell-off of almost every asset class. With stocks, bonds and commodities seeing across the board selling, one has to wonder why? Continue reading “June 2013 Commentary”
With the US stock market seeing gains in each of the last 4 calendar years and rising 12% so far in 2013, many investors are worried that the stock markets are overvalued. Continue reading “April 2013 Commentary”
Monetary Policy – The regulation of the money supply and interest rates by a central bank, such as the Federal Reserve Board in the U.S., in order to control inflation and stabilize currency. Monetary policy is one the two ways the government can impact the economy. By impacting the effective cost of money, the Federal Reserve can affect the amount of money that is spent by consumers and businesses.
Fiscal Cliff – A combination of expiring tax cuts and across-the-board government spending cuts scheduled to become effective December 31, 2012. The idea behind the fiscal cliff was that if the federal government allowed these two events to proceed as planned, they would have a detrimental effect on an already shaky economy, perhaps sending it back into an official recession as it cut household incomes, increased unemployment rates and undermined consumer and investor confidence. At the same time, it was predicted that going over the fiscal cliff would significantly reduce the federal budget deficit.
Diversification – A portfolio strategy designed to reduce exposure to risk by combining a variety of investments, such as stocks, bonds, and real estate, which are unlikely to all move in the same direction. The goal of diversification is to reduce the risk in a portfolio. Volatility is limited by the fact that not all asset classes or industries or individual companies move up and down in value at the same time or at the same rate. Diversification reduces both the upside and downside potential and allows for more consistent performance under a wide range of economic conditions.