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Second Quarter 2015 Commentary

Second Quarter 2015 Commentary

The second quarter of 2015 turned out to be a challenging one for world equity markets. International markets added positively to the performance from the first quarter of 2015 through the middle of May only to fade as the second quarter ended. The domestic markets saw some strength as the international markets faded but only generated total returns of .03% for the second quarter, as measured by the S&P 500 Index.  For most of 2015 stocks have traded in a narrow range.  It also has now been almost four years since the S&P 500 last saw a 10% correction.

Concerns about the unresolved debt issues in Greece weighed on both equity and income markets during the quarter. Additionally, the multiyear bullish market for Chinese equities appeared to fade as uncertainty about their internal growth rate and export growth rate loomed. Against this background the U.S. Federal Reserve Bank continued to support very low interest rates even while investors’ fears of rate hikes grew.

Portfolio performance for SignalPoint strategies was uneventful for the quarter.  Long dated bond funds and Real Estate Investment Trust (REITs) prices fell during the second quarter as the yield on the 10 year Treasury bond increased.  The increase in interest rates led to a modest decline in SignalPoint’s income strategies. The US stock strategies also showed small declines. Global and International strategies turned in neutral to slightly positive results by the end of June. Blended Equity and Income type strategies had small losses due to both weak equity and income fund performances.

SignalPoint’s Market Risk Indicator (MRI) remained quite steady throughout the quarter and only slightly above its historical average. Confusion about forward looking market direction kept both the markets and the MRI in a very tight range. The Cash Reserve levels of the SignalPoint strategies remained in line with the MRI’s suggested cash percentage throughout the three month period. The MRI along with the SignalPoint investment process showed value in the conservative Equity/Cash balance maintained.

We appreciate our clients’ continued loyalty and support. We remain focused on signs of market stress and 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