We are writing in regard to the recent market developments. First and foremost our thoughts and prayers go out to the people of Japan. Obviously the markets have reacted negatively to not only Japan’s challenges, but to the ongoing difficulties in Libya and Saudi Arabia. In addition to current events, more potential problems lie on the horizon in Japan and elsewhere, but with that said, there are also positives brewing. Oil is off its recent highs, which is likely to result in lower gas prices at the pump and last week’s economic data highlighted a 1% surge in February retail sales. Yesterday the Federal Reserve Board commented on recent market events and reiterated that the recovery is on firm ground, labor market conditions continue to improve and that household spending and business investment are up. They also plan to continue with “Quantitative Easing 2” as planned when initially announced in November.
What are we doing to deal with these market conditions? Where we have discretion, we have already sold one of our moderate allocation positions which has held up well during the last week. By putting these monies in cash it will allow us to deal with both negative and positive market conditions. We were planning on repositioning this in the near future anyways, but thought it prudent to conserve the profits we’ve made in the position over the past year. As many of you know, we also sold a corporate bond position recently. This was in anticipation of potentially higher interest rates and to lock in the gains made. This position is also in cash currently. Given the recent events, we believe having cash provides an opportunity to conserve capital now, and be opportunistic, as things improve going forward.
In closing, we express our deepest condolences to the Japanese disaster victims and their families. As a company, we plan to direct our annual gift toward relief agencies that will be helping to support the people of Japan. As always, feel free to contact us with any questions.
This entry was posted
on Friday, March 18th, 2011 at 9:28 am and is filed under Market Commentary.
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Japan and Recent Market Developments
We are writing in regard to the recent market developments. First and foremost our thoughts and prayers go out to the people of Japan. Obviously the markets have reacted negatively to not only Japan’s challenges, but to the ongoing difficulties in Libya and Saudi Arabia. In addition to current events, more potential problems lie on the horizon in Japan and elsewhere, but with that said, there are also positives brewing. Oil is off its recent highs, which is likely to result in lower gas prices at the pump and last week’s economic data highlighted a 1% surge in February retail sales. Yesterday the Federal Reserve Board commented on recent market events and reiterated that the recovery is on firm ground, labor market conditions continue to improve and that household spending and business investment are up. They also plan to continue with “Quantitative Easing 2” as planned when initially announced in November.
What are we doing to deal with these market conditions? Where we have discretion, we have already sold one of our moderate allocation positions which has held up well during the last week. By putting these monies in cash it will allow us to deal with both negative and positive market conditions. We were planning on repositioning this in the near future anyways, but thought it prudent to conserve the profits we’ve made in the position over the past year. As many of you know, we also sold a corporate bond position recently. This was in anticipation of potentially higher interest rates and to lock in the gains made. This position is also in cash currently. Given the recent events, we believe having cash provides an opportunity to conserve capital now, and be opportunistic, as things improve going forward.
In closing, we express our deepest condolences to the Japanese disaster victims and their families. As a company, we plan to direct our annual gift toward relief agencies that will be helping to support the people of Japan. As always, feel free to contact us with any questions.
Jim
This entry was posted on Friday, March 18th, 2011 at 9:28 am and is filed under Market Commentary. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.