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2nd Quarter 2016 Commentary

2nd Quarter 2016 Commentary

 

The second quarter of 2016 began with the SignalPoint Market Risk Indicator (MRI) slightly bullish after its February, 2016 low point. The MRI continued to rise back to the center of its neutral range and has remained in neutral territory through the end of June. While many domestic and international news events have unfolded during the last three months the MRI remained neutral.

Considering the relatively small changes in the major stock indexes during the second quarter, 2016 the SignalPoint investment strategies kept pace with the performance their respective benchmarks. Income strategies continued to perform and the blended (income and growth) strategies also benefitted from the strong performances in income components. Although the international stock markets have been sluggish in 2016 SignalPoint’s strategies that invest outside the U.S. have outperformed compared to respective benchmarks.

As part of the SignalPoint Process of portfolio management we maintain substantial reserves of liquidity to be able to respond to negative market events by adding to out-of-favor positions. During the second quarter of 2016 our cash levels remain under tight control. These cash levels are currently modestly lower than they have been in the last 24 months. While interest earned on cash remains nominal, it has slowly improved over the past year. Rates on short term Treasuries and money market funds have remained flat through the first 6 months of 2016.  As the quarter closed the split of the United Kingdom from the European Union (Bexit) gave the US long term Treasury bond ETF a boost in value. Precious Metals also improved during the second quarter and some modest inflationary pressures are being recognized and acknowledged. It remains possible that we may get an increase announced by the Federal Reserve for base interest rates by the end of 2016.

We welcome comments and questions relative to risk assessment and performance so feel free to contact your advisor or me.

Sincerely,

Thomas M. Veale

Chief Investment Officer

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