We here at Shadowridge have spent much of the month of January reviewing our strategies closely, and looking for ways to be more efficient. One of the ways has been to consolidate lesser-used strategy variations into a single model. For example, we had three variations of our Defensive Allocation model. This was our oldest strategy, which Ryan has been using since summer of 2008. It made sense to re-consolidate the three models into one “balanced” version, since the variations made little improvement to risk or reward. We did this earlier in the year.
Another change has been the addition of our “SDW Retirement” model on the Trust Company platform. This “core” model is a variation on what we’ve been doing for our 403(b) clients since July 2012. We’ve been so happy with its results that we figured it should be available to our non-403(b) clients.
Also, as our clients’ assets have grown, our access to lower-priced institutional funds has greatly improved. This equates to a cost savings that gets passed on directly to our clients.
Lastly, we are getting close to rolling out our “401(k) Help” Newsletter. This has been a work in progress for some time, but we feel it is nearly ready to publish. A test group has been assembled (you know who you are) to help us make sure it makes sense and is easy to follow. Watch for more news on this in the coming months.
Now, on to our monthly market commentary….
It’s “déjà vu all over again!” Much like last January, the stock market sold off into the first few weeks of the year. It then rebounded and hit new all-time highs. Many suggest the bounce back this year is due to the price of Oil stabilizing and rebounding – at least for now. We are hesitant to say that the bottom is in. It certainly seems that the big selling pressure has slowed dramatically. Meanwhile, we are enjoying the lower prices of gas at the pump.
Sectors have remained on the defensive: Utilities, healthcare, consumer services and consumer goods. Not much has changed here in the past 30 days.
International – the MSCI EAFE has been on the rebound so far this February. But at this point, it doesn’t change our “bearish” outlook on the global markets. To us, the long-term trend and outlook is still negative. Recession still looms in Europe and the debt situation in Greece isn’t likely to help anything. So what are we doing about it? Avoiding it and looking for greener pastures, that’s what!
Bonds – with the rebound in stocks, both domestic and international, it’s only fair to see a drop in bonds. In January, the majority of the bond markets had really gotten ahead of themselves. However, our outlook on bonds in general is that they are still in a solid up-trend, and after this short break it looks possible they could resume their positive move. Of course this is still much to our (and many other economist’s) surprise. Just when you think bond yields can’t get any lower…they do! …thus keeping bond prices high.
Fun Fact of the Month: The NASDAQ stands for “National Association of Securities Dealers Automated Quotation.” It was created in 1971 and was the world’s first electronic stock exchange. On its first day, February 8th, 1971, it traded 2,500 stocks. Today it is one of the US’s largest stock exchanges, trading over 2 billion shares daily.
We hope you are having a great 2015 so far! If you have any questions or need anything regarding your accounts, please don’t hesitate to contact us.