Market Update Q3 2013

Happy Friday!

It’s been a whirlwind week for the markets.   Volatility has returned as we deal with the government shutting down and running out of money to pay its’ bills. This month companies report 3rd quarter earnings. Our expectations are for slow but steady progress in earnings, with very little improvement for growth in revenues.

But remember, the media does love to hype the issues in Washington and get our adrenalin pumping.     Our advice?      Remain focused on the long-term and make sure you are invested in assets that make sense for you.

Have a great weekend!

Warm regards,

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Catherine Maniscalco Avery

 

The backbone of CAIM is to employ a classic long term investment strategy including dividend paying stocks. CAIM is an independent, women owned investment management firm specializing in managing investment portfolios for women and baby boomers.

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October 11, 2013|  Issue No. 46
In This Issue
Market Update 3Q
Only the Wealthy
Market Update 2Q

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Call me at 203.966.2712
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Market Update 3Q 2013 

 

To taper (wind down the bond purchasing program which will cause interest rates to rise), or not.  This was the question as regards the market in this 3rd quarter.

 

If you look at a market chart for this quarter, you will see we began July with a nice summer rally.  This quickly led to a tumble in stock prices at the mere mention of the Fed scaling back on the quantitative easing program (QE).

 

It has been like this for the past few years.  The market data looks consistently good for a few months, then it runs out of steam and the Fed comes to the rescue with another QE program.   Well, we ran out of steam again and this time the Fed decided not to taper.     And yes, the market did rally despite news of a sluggish economy and impending government shutdown, because we continue to artificially manufacture liquidity to keep the market going.

As far as performance, there was also a big difference in returns between the DOW and S&P 500 for the 3rd quarter.  The DOW returned +2.2% versus +5.2% for the S&P 500.

Today we patiently await a resolution to the debt ceiling.   While markets have been volatile, we do not expect the nonsense in Washington to have a long-term effect on them, or the companies we invest in.  It may be, however, that we will see some dislocations in upcoming economic data that can cause short term volatility in the markets.   The good news is that Janet Yellen has been nominated for the Fed chair position.   Her expressed goal has been to keep the interest rate environment very low, until the economy can sustain itself without any extra support.

Most importantly, our portfolios are holding up well amidst the volatility.  The companies we own continue to generate cash, pay dividends and keep their debt levels low.  The following companies, for example, have all had significant dividend increases in the 3rd quarter: 

Microsoft   (MSFT $33.07, 3.4% yield) +21%

Caterpillar   (CAT $83.52, 2.9% yield) +15%

Illinois Tool Works   (ITW $74.23, 2.3% yield) +10%

Please feel free to call with any questions or comments.

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Only the Wealthy Never Retire 

Like most of us you’ve probably pondered the question more than once:  when am I going to be able to retire?   Maybe you just can’t wait….Read more >>

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Market Update – 2nd Quarter  

While economic growth has not been spectacular, we are making some progress.

The S&P 500 continued….Read more >>

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Disclaimer: NO CONTENT PUBLISHED AS PART OF THE CAIM LLC NEWSLETTER CONSTITUTES A RECOMMENDATION THAT ANY PARTICULAR INVESTMENT, SECURITY, PORTFOLIO OF SECURITIES, TRANSACTION OR INVESTMENT STRATEGY IS SUITABLE FOR ANY SPECIFIC PERSON.  TO THE EXTENT ANY OF THE CONTENT PUBLISHED AS PART OF THE BLOG MAY BE DEEMED TO BE INVESTMENT ADVICE, SUCH INFORMATION IS IMPERSONAL AND MAY NOT NECESSARILY MEET THE OBJECTIVES OR NEEDS OF ANY SPECIFIC INDIVIDUAL OR ACCOUNT, OR BE SUITABLE ADVICE FOR ANY PARTICULAR READER.  EACH READER AGREES AND ACKNOWLEDGES THAT ANY SPECIFIC ADVICE OR INVESTMENT DISCUSSED IN THE BLOG MUST BE INDEPENDENTLY EVALUATED BY THE READER AND HIS OR HER ADVISER IN VIEW OF THE READER’S INVESTMENT NEEDS AND OBJECTIVES.

 

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