2015 Q1 Quarterly Commentary

“March Madness isn’t just for basketball anymore”

We experienced lots of thrilling and unnerving action both up and down the court in the markets. At year-end 2014, the S&P 500 was the All-star and International positions were the under achievers. The opposite proved true in the first quarter of 2015. The chart below captures the S&P 500’s volatility during various periods as it rotated between winning and losing for an overall quarterly return that was just under 1%. Lots of action – not much traction!

Screen Shot 2015-04-13 at 11.18.43 AM

Uncertainty around the interest rate policy of the Federal Reserve has contributed much to the volatility. Fed Chair Janet Yellen’s last statement announced, unhelpfully, that the Fed is “data dependent” and the pace of interest rate increases could “speed up, slow down, pause, or reverse.” The main driver of the stock market is always corporate earnings, rather than political or media pronouncements. The strengthening U.S. dollar hurt U.S. companies’ foreign earnings, which were down 5.3% in the 4th quarter 2014. A strong dollar makes U.S. purchases abroad cheaper and foreign purchases of U.S. products more expensive. Most of the companies in the S&P 500 receive at least 50% of their earnings from abroad.

The current volatility brings back memories of how terrified Americans were in 2008 when the S&P dropped 37%. It is a test of resolve to follow Warren Buffet’s advice to “buy when others are fearful” – a methodology that works! Yes, such opportunities are fearfully predicted and always unpleasant, but in retrospect every market correction stabilizes over time.

It begs the question: if downturns produce great buying opportunities, why are we afraid of the next one? Having well balanced portfolios and enough cash for current needs, allows us to stay the course during market corrections knowing that the investments will support your spending needs for many years beyond today’s headlines.

Our technical indicators are showing weakness in the emerging markets asset class, so we will immediately reduce those respective allocations by up to 25%.

The chart below reflects the performance of various indices over the past quarter.Screen Shot 2015-04-13 at 11.20.14 AM

The chart shows that even in a poor quarter for the S&P 500 other categories mostly did well – a March “win” for asset allocation and proper diversification.

 

SH&J Happenings

On our website (shwj.com) every other Thursday we post our most recent economic discussion from our Investment Committee meeting. Just click on “Blog” in the upper right hand corner to listen in.

Our offices will be CLOSED Monday, May 25th for Memorial Day and Friday, July 3rd for the July 4th holiday.

We will continue our tradition of closing our office at 1pm each Friday from Memorial Day to Labor Day so our hardworking staff can take advantage of the lovely Colorado summer! Of course we will be available if you need us, yet we would appreciate your calls on Friday mornings if possible.

The SH&J Team

2014 Q4 Quarterly Commentary

In our quarterly reports to clients, we always include commentary on the markets, economy and other financially relevant information. Our 2014 Q4 reports recently went out, and we wanted to share our commentary with you as well. We would also love to hear your questions and comments in the comments section below.

New Year’s Resolution – “Do More of What Makes You Happy”

We think that would be a good resolution.  However, focusing on the financial markets around the world will rarely help!  The Media elicits emotions that cause lots of dissatisfaction and fear.

In 2014, for example, few categories did as well as big blue chip American companies.  The S&P 500 index did great, so now the news is full of advice about how you “should” have invested!  Of course with us, you DID invest in the S&P 500 – and your diversified portfolio also invested in bonds and other assets worldwide.  Remember 1987, 2000, and 2008 when the S&P 500 was, as the pundits later agreed, the one place to avoid investing in – EVER AGAIN! (Source)

Our society seems to love being unhappy about markets!  “Are they going to correct?”  Yes – we just don’t know which ones, when, and how badly.  “Did we miss out on the ‘best performance of the year/decade/century?”  “Which asset class was the one we should have exclusively chosen?”

If you had thought that the S&P 500 was the best place to be in 2014, think again.  The top performing market of 2014 was China (up 44%)!  Who would have guessed?!

We saw a fascinating report from the Medical Media about that other perennial New Year’s resolution – wanting to lose weight.  There exist as many, if not more, diets as there are sure fire ways to “beat the market”.  The American Medical Association threw up its hands and opined that although all diets may work, the only one certain to do so is “the one the patient will stick with!”  We think that makes a lot of sense, and we try hard to design investment portfolios that “the client can stick with.”

2015 will probably be the year the Federal Reserve raises interest rates – very carefully (Source).  We expect that our US bonds and stocks will weather the change well, despite turbulence and dire headlines.

Continue reading

Sharkey, Howes & Javer’s Advisory Team Makes the List as 2014 Five Star Wealth Managers

SHJ_5_Star_Wealth_Managers
(DENVER, CO) Sharkey, Howes & Javer’s team of financial advisors has been recognized as 2014 FIVE STAR Wealth Managers in the November issues of 5280 and ColoradoBiz magazines.

Eileen Sharkey, CFP®, Lawrence Howes, CFP®, Joel Javer, CFP®, Mimi Hackley, CFP®, Karlton Childress, CFP® and Harold Kirschner, CFP® of Sharkey, Howes & Javer, are among the Denver area wealth managers with at least five years of experience and no regulatory actions against them to be recognized as 2014 Five Star Wealth Managers.

There were 4,385 award candidates in the Denver area that were considered for the Five Star Wealth Manager award. Only 528 (approximately 13% of the award candidates) were named 2014 Five Star Wealth Managers. Continue reading

2014 Client and Friends Event Recap

SHJ_CrowdOur annual Client Appreciation Event took place on October 9th at The Cable Center, which is located on the University of Denver’s beautiful campus. Our guests enjoyed a large spread which included prime rib, build-your-own tacos, lettuce wraps, a chocolate fountain, and even mini root beer floats. Despite the rain, the night was entertaining, mind-stimulating and very enjoyable.

To start off the presentations, Eileen gave us an interesting review of the firm’s most recent business trip to Indonesia and Singapore. Then, for the second year in a row, we welcomed Chief Political Strategist Greg R. Valliere to share his thoughts on the political and economic landscape. He shared the following 6 big themes he feels the media has gotten wrong or has exaggerated:

  1. Washington is hopelessly broken
  2. The Federal Reserve is gridlocked
  3. The budget deficit has plunged and we don’t have to worry about it
  4. The Republicans are now resurgent
  5. Hillary Clinton would be terrible for the market
  6. ISIS is the most frightening geopolitical issue facing us today

To hear Greg’s thoughts on each of the themes he feels the media has gotten wrong, watch the complete presentation below.

We hope you enjoyed the evening as much as we did. For those of you who weren’t able to join us this year, you won’t want to miss our 2015 Client and Friends event as we will celebrate the 25th Anniversary of Sharkey, Howes and Javer. Until next time!

Sharkey, Howes & Javer is Proud to Introduce Our New Look

The SH&J logo has remained almost the same since we opened our doors over 20 years ago. Though our logo has remained the same, our firm has grown and the world around us has changed. So, we embarked on a journey to create a modern logo reflective of who we are and what we provide for our clients.

We are thrilled to introduce our new logo to you today! Our goal for all of our clients is to Plan, Invest & Succeed. We believe our new logo captures that goal and will represent SH&J well as we continue to grow.

That’s not all! We have other changes brewing… for example, this is our first blog post. As the year goes on, you will begin to hear more from us on the blog. We’ve also put together some informative videos to be released throughout the year and added a new planner to our team.

The core of who we are has not changed, nor will it change. We’ve just adapted to a new world and changing business environment.  The changes around here have been exciting and we are all embracing them.

Here’s to the new look for SH&J and a successful 2014 for all!