Client Update

May 2015 - Client Update

The big news right now is…

First quarter economic activity in the US was low, but this has been the case in the first quarter for the last few years, so it may not be significant.

The US Economy

Going forward, the US economy looks good enough. It does not appear that there are any significant “bubbles” in the economy or any other underlying weaknesses. Some stock analysts and economists complain that consumers are spending instead of saving, but that does not concern me. In terms of the overall strength of our economy, I would rather see strengthening balance sheets in US households even if it has a slight detrimental impact to businesses.

The US Economy

Some of the weaker economies around the rest of the world are showing some signs of improvement. Investing outside of the US has been fairly dull for a few years, but I would expect that to improve over the next few years beginning with this year.

Investments

The only investments that I find to be worrisome right now are long term bonds. I would be very cautious about being invested in long-term bonds of any kind.

I think US stocks will do slightly well this year. Most other asset classes look fairly strong.

I am continuing to recommend that we rebalance into holdings in Foreign Stocks, Emerging Markets Stocks, and in Commodities.