CCR News & Resources

News & Resources

Portfolio Strategy & Outlook

08/15/2010
CCR Wealth Management Investment Committee

The market volatility we have all experienced in the last two weeks, and especially the last few days has all investors understandably on-edge.  “Words of Wisdom” that attempt to explain recent global sell-offs, rallies, and outline the near future (given the present circumstances), run the risk of getting too far out in front of ever-evolving current events to effectively inform strategy.

We do, however, think there are some imperative perspectives CCR Wealth Management feels all investors should bear in mind today:

  • News over the weekend of the US credit downgrade by Standard & Poor’s was seen by most investment professionals as a foregone conclusion weeks prior—and therefore unlikely the primary driver of Monday’s (and Wednesday morning’s) downside volatility.

Subsequent downgrades on balance sheets backed by US Government and government-related bonds are inevitable—and have already begun (Fannie Mae and Freddie Mac were only the beginning).  Again—this is known, and already reflected in prices.  We expect such downgrades could affect insurers and municipalities among other entities.

  • US Debt remains the safest investment in the world in the view of virtually all investors.  This is evidenced by the tremendous influx of money into Treasury Bills, Notes and Bonds since the S&P announcement last Friday (thus driving yields to all-time lows).
  • European fiscal concerns, and related “headline risk”, in our view, is the primary cause of concern, and to the extent it is possible to divine, the primary source of global investor nervousness. 
  • The market lows on Monday, August 8, represent a 15.62% decline from the year’s highs in May.  This puts the S&P 500 firmly in correction territory currently.  Corrections are normal market occurrences, and each correction comes with its own disquieting reasons.  Last summer’s correction was approximately 14%.

While this may sound cliché, we still believe that staying the course in a diversified portfolio is the most prudent strategy especially in volatile, perhaps even violent markets.  Please do not hesitate to contact us with any questions or thoughts.  If we are not available, we will return your message promptly.

 

 

 

The views are those of CCR Wealth Management LLC and should not be construed as specific investment advice.  Investments in securities do not offer a fixed rate of return.  Principal, yield and/or share price will fluctuate with changes in market conditions and, when sold or redeemed, you may receive more or less than originally invested.  All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.  Investors cannot directly invest in indices.  Past performance does not guarantee future results.  Securities offered through Multi-Financial Securities Corporation.  Registered Broker/Dealer, Member FINRA/SIPC.  Investment Advisor Representative, CCR Wealth Management, LLC.  Registered Investment Advisor.

Multi-Financial Securities Corporation and CCR Wealth Management , LLC are not affiliated companies.