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First Quarter 2015 Commentary

First Quarter 2015 Commentary

The stock markets turned in mixed performance for the first quarter of 2015.  Modest gains (less than 5%) were posted by most major indices with the primary exception being the Dow Jones Industrial Average which closed the quarter off approximately 1%.  The volatility seemed to increase over the quarter as reflected in the S&P 500 index which experienced several 2-3% daily declines, but still managed to hit new highs in February before declining in March.

The Energy sector continued its weakness throughout the quarter as it drifted lower. The same can be said for the Gold ETF which SignalPoint uses in some portfolios. These two components have struggled over recent quarters, however downward pressure seems to be easing in recent months.  A positive of such a decline is SignalPoint was able to add shares of the Energy sector ETF during quarter. The international markets saw solid performance in Europe and the Pacific Rim including Japan where the SignalPoint process provided some selling activity.  Meanwhile there was weaker performance in Latin America and the Emerging Markets although no shares were added to portfolios.

The strengthening US dollar created an increased demand for US treasuries. Although the rise in the market price of bonds and bond funds has depressed the yield percentages the dividends remains steady. Rising bond prices also triggered SignalPoint to trim its long-term bond ETF in its income portfolios during the quarter.

Finally, the cash used to buy the Energy ETF and a few other selected sector ETF’s has been partially offset by selling in other sectors (Consumer Cyclical, Healthcare, Technology, Utilities and Industrials). SignalPoint’s equity strategies have maintained cash reserves near levels of a year ago. Overall portfolio cash levels range between 26% and 30% and relate closely with the SignalPoint MRI’s suggested level of risk in the market. The SignalPoint Market Risk Indicator (MRI) remained relatively neutral for the first quarter and little changed from the end of 2014.

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