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2nd Quarter, 2014 Commentary

Second Quarter 2014 Commentary

Recently I was reminded of a quote, “Climate is what you expect, Weather is what you get.” Investment management can be very difficult at times, but managing expectations always seem to be a far greater challenge. Following an excellent year in 2013, expectations for 2014 ranged the spectrum from continued double digit gains to “The End Is Near.” Through the first six months of 2014, those expecting gains similar to last year have been a bit disappointed. Those expecting the end of the World have been modestly surprised. The SignalPoint Process is designed around knowing where we are relative to market risk and what we’ll do as market conditions change. We design and manage our SignalPoint strategies with expectations in mind, but we let the SignalPoint investment process dictate the actual performance.

The SignalPoint Market Risk Indicator (MRI) at the start of the second quarter of 2014 was centered in the middle of the Neutral range. The MRI has remained within a very tight range of that starting point. Statistically there appears to be nice balance between risk and potential reward in the stock markets. Even as news events from around the world created headlines, market volatility has remained historically low. Competing market commentators continue to argue that investors are too complacent while other commentators are convinced there remains a steep wall of worry to climb.

The various SignalPoint portfolios, both income and equity strategies, all showed modest second Quarter and year-to-date gains. The cash reserve levels of all income and equity strategies remain in line with the level suggested by the MRI. The combination of adequate cash reserve levels and low market volatility offered very few trade opportunities during the second Quarter.

We appreciate our clients’ continued loyalty and support. We remain vigilant watching for signs of market stress and looking for opportunistic trade potential. Please feel free to call or write should you have further questions.

Thomas M. Veale

Chief Investment Officer

SignalPoint Asset Management, LLC

SignalPoint Asset Management, LLC
Office Hours: 8:00 am—4:30 pm Monday—Friday
1201 E. Walnut Street, Springfield, MO 65802
Phone: 877.769.9980