Weekly Market Recap This week saw improving US job market data as the Kansas City Fed's Labor Market Conditions Index posting its highest reading since 2008. However, internationally data was weaker - industrial production declined for November in both the UK and India.
As 2016 has started with volatility for investors we want to take a moment to explore what that means. If we examine the performance of the S&P 500 back from January 1950 to the present day, we see that on a little over one fifth of trading days, the S&P 500 was trading at levels 10% or more below its 52 week high. So declines have been a fairly routine occurrence for the US market historically.
However, looking back at recent history from January 2012 to the present, the market only spent 1% of its trading days at 10% or more under the market's 52 week high. So based on the S&P 500, the last 4 years of history have been unusually stable for the US stock market relative to its broader history going back to 1950. So what we are seeing currently may be more of a return to the traditional pattern of market volatility rather than something new or unheard of.
Of course, aside from offering rebalancing and tax-loss harvesting opportunities for our Premium clients, we don't believe that volatility has a significant impact on longer term return prospects for your portfolio. This is very important to remember during volatile times like these, especially since when we look at the S&P 500 over the past 60 years, after periods of decline, the market has often returned to make new highs. We don't believe this time will be any different.
Notes:
Labor Markets Conditions Index:
https://www.kansascityfed.org/research/indicatorsdata/lmci
UK Industrial Production:
http://www.econoday.com/economic-calendar.aspx?link=http://global-premium.econoday.com/
India Industrial Production:
http://www.econoday.com/economic-calendar.aspx?link=http://global-premium.econoday.com/
Disclaimer:
The views expressed are for informational purposes only and are not intended to serve as a forecast, a guarantee of future results, investment recommendations or an offer to buy or sell securities by FutureAdvisor. All expressions of opinion are subject to change without notice in reaction to shifting market, economic, or political conditions. The investment strategies mentioned are not personalized to your financial circumstances or investment objectives, and differences in account size, the timing of transactions and market conditions prevailing at the time of investment may lead to different results. Clients may lose money. Past performance is not indicative of future results. Investments in securities involve the risk of loss. Any tax strategies discussed should not be interpreted as tax advice and do not represent in any manner that the tax consequences detailed will be obtained. Clients should consult with their personal tax advisors regarding the tax consequences of investing.
The S&P 500 is a registered trademark of The McGraw-Hill Companies, Inc. and is an unmanaged index of the common stock prices of 500 widely held U.S. stocks. The figures for the S&P 500 index reflect the reinvestment of dividends but do not reflect the deduction of any fees or expenses, which would reduce returns. References to market or composite indices, benchmarks or other measures of relative market performance over a specified period of time (each, an "index") are provided for your information only. Reference to an index does not imply that the portfolio will achieve returns, volatility or other results similar to that index. The composition of the index may not reflect the manner in which a portfolio is constructed in relation to expected or achieved returns, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which are subject to change. Investors cannot invest directly in indices. Your Portfolio Summary | $8,546.16 Your Total Assets | Ways To Improve Your Portfolio | 0 Accounts with Actions | Your portfolio has no recommended actions right now. We'll watch over your investments and alert you with an email when there are actions for you to complete. Sign in to see detailed steps  | | Sign in to see your full dashboard | | 
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