Market Update – October 2016

The past three months in the market has given us a lot of firsts. We saw Great Britain vote to leave the European Union in late June which shocked global markets and sent most indices into a tailspin for a few days. Markets recovered far quicker than almost anyone had expected, the small down turn resulted in large volume of buying activity which ultimately led to new highs in all three of the U.S. market’s major indices. The Brexit decision opened up value in a lot of companies that helped turn the market around as there were large sell-offs followed by an extended amount of buying. The U.S. Market’s uptrend was marked by one of the longest streaks in history of trading days where the market moved less than 1%. It appeared that the huge amount of volatility that had surfaced in response to the Brexit was quelled almost instantaneously as life seemed to continue as usual. With oil forming a decent base around $50 dollars a barrel and steady macro-economic numbers the economy has been looking stable through the past few months.

However, this stability could be short-lived. We are all aware of the upcoming election and how influential the outcome could be and the market has certainly taken note. Changes in polls have affected the market and volatility has reared its head in once again. With the election season being the most incendiary we have ever seen there will likely be an increase in market volatility as well in the coming months. With economic numbers coming in and looking increasingly promising for the strength of the economy we could see a rate hike from the Federal Reserve by the end of the year which would have short term implications for the market but ultimately benefit the economy moving forward. That’s not to say there aren’t negative issues hovering over the markets run, negative interest rates abroad as well as oil’s unpredictability and demand definitely have the ability to affect the market. With no large surprises through the election season we still remain optimistic about the remainder of this year.

The stock market and many Americans are dividend on who should be the next President. As the election nears, we will also continue to see Democrat Hillary Clinton and Republican Donald Trump argue about their differences. However, one agreement among the candidates is investing in improved electrical grids, roadways, bridges and tunnels. In a recent article posted on CBS Marketwatch entitled “Infrastructure ETFs rally in 2016 as Clinton, Trump float new policies,” the article discusses how both candidates have called for massive investments in infrastructure.

If you jump in your car and drive anywhere you will see this massive spending in infrastructure has already begun and will probably continue on for a long time. Two of our portfolios, Alternative Asset Income and Income Generator, have seen some significant benefits this year by being invested in companies and indexes that are directly benefiting from our spending.

If you have any questions about these two portfolios or any questions about your investments, now is a great time to set up a review. We certainly don’t want you to worry about the elections, what the Federal Reserve will do with interests, or the markets in general. Remember that is our job. But, if you want to get an update on your accounts, just call the office and set up a review.


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