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3rd Quarter 2016 Market Commentary

The third quarter of 2016 began with the SignalPoint Market Risk Indicator (MRI) slightly above its long term median. The MRI drifted around the center of its neutral range and has remained neutral through the end of September. Nothing out of the ordinary shook the MRI or its underlying components during the third quarter.

The SignalPoint strategies generally performed in line with their respective benchmarks for the third quarter ending September 30th, 2016. July was the best month of the quarter as the markets quickly recovered from the initial shock of the UK referendum vote to leave the European Union (Brexit).  The S&P 500 also managed to set multiple record highs in July.  August, on the other hand, was uneventful as the typical summer doldrums set in.  September showed modest gains in the market and in SignalPoint portfolios as the Fed remained on hold with regard to a rate hike. There were a few SignalPoint portfolios that saw either a trimming of positions or a rise in price targets during the course of the quarter.

As the markets enter the final quarter of 2016, plenty of issues are on the horizon, including the election. If corporate earnings meet or beat expectations and interest rates remain low, the market will likely continue to move higher.  However, if data released during the quarter points to an economic slowdown, if earnings disappoint, or the Fed acts to raise rates in December we may see a market sell off.  From a fundamental view, valuations appear to be a bit stretched as the fourth quarter begins so both earnings and the economy will be in focus.

Regardless of the immediate direction of the markets, SignalPoint believes its portfolios current cash reserve levels allow great flexibility to respond to market movements.  Average cash levels have remained constant and kept pace with portfolio growth. So far
2016 has provided solid performance for most portfolios. This performance provides the opportunity to review your portfolio and reassess your risk tolerance and longer term goals.

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

Sincerely,

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