Staying on Track

Staying on Track

Staying on Track 493 372 AMA Team

Screen_Shot_2013_05_13_at_11.46.17_PMGood day to everyone. Thanks to James for getting out the weekly write up last week. The markets continued with their upward trend along with new records in the S&P 500, so let’s take a look at the week that was!
US job reports, as well as some better than expected corporate reporting helped boost market confidence and we saw a slow but steady rise in most global markets. This positive trend has been going on since the beginning of the year and although it faces many obstacles, the momentum behind this trend has yet to be derailed. Historically, May markets have been prone to drop as investors profit take from gains earlier in the year, however, this seemingly doesn’t appear to be taking place as it usually would, with few looking to jump ship just yet.
As a result though, what can we expect? Well, it’s anybody’s call, but indications such as the VIX which we’ve discussed in previous Money Matters shows the VIX just over 12 and its 52 week range from 11 – 27. Although the VIX is only one small indicator of many, and a short term one at that, it does seem that markets are relatively calm and no major changes are expected, or appear to be on the horizon.
Screen_Shot_2013_05_13_at_11.51.15_PMn addition, about 68% of companies reported better than expected results in Q1 and although that’s slightly down from Q4 last year, overall, for the majority, it’s still positive. Add these together, and you may not want to be standing on the tracks with the momentum of a train coming at you…. So we’d say it’s best to stay on board and diversify!
Turning to China now. Their reporting has been a bit sluggish of late but nothing to cause any lingering concerns. The immediate effect however is that the lack of manufacturing continues to weigh on commodities and materials (which will ultimately rebound), but the question remains of when this will happen. Commodity prices have taken a jump from their lows a few weeks ago but still have a way to climb to return to any previous averages. However, as they are needed, and difficult to replace, it should not be a question of if, but when.
As the markets continue on their rise, be sure to maintain your diversification and don’t lose sight of overall exposure. And once again, we continue to maintain investors proceed with a balanced portfolio at this time.
For Austen Morris Associates’ investors – talk with your advisor about any repositioning to take advantage of markets at this time. For more information about Austen Morris Associates please visit our website.
Darren Cox
Co-Head of Portfolio Management
Austen Morris Associates Wealth Management & Investment Team
www.austenmorris.com

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