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Third Quarter, 2014 Commentary

Third Quarter 2014 Commentary

While there were news events which may have worried the markets during the third Quarter of 2014, not much seemed to affect the general direction of the indexes. SignalPoint’s Process triggered mostly selling activity during the quarter in response to the slow rise in price/share of the ETFs in the portfolios. However, even selling activity was somewhat slower than we’ve seen in recent years.

The SignalPoint Market Risk Indicator (MRI) again narrowly moved about in in the middle of its Neutral range. Close attention to the cash reserve level for each holding was kept in relationship to the sell trade signals that were generated during the Quarter. At the close of September, 2014 the MRI stood at an indicated 27% cash being appropriate for diversified equity portfolios.

During July and September all portfolio strategies showed negative results. August figures were positive with the exception of the CurrencyPoint portfolio. The gains in August were outweighed by the July and September losses giving negative results to the entire range of our offerings. The greatest declines were seen in the Ex U.S. markets so the International Signal portfolio along with our globally diversified portfolios showed the greatest weakness. The downward direction was not enough to generate any buying activity by the Quarter’s end in that discounts were only modest compared to our previous selling activity.

The Year-To-Date performance of our portfolios remained positive for all but the CurrencyPoint and International Signal portfolios. Generally the portfolios tracked closely with the selected benchmark indexes. All portfolios closed on September 30, 2014 with between 22% and 32% cash reserves available.

Since the end of Q3 we’ve seen a significant rise in market volatility and some sector specific heavy downward activity. In response, the SignalPoint Process recommended accumulation of additional share inventory in the Value Line 100 Most Timely Stocks, U.S. Industrials, U.S. Energy and U.S. Basic Materials sectors. Further weakness in Ex U.S. areas triggered buying in the Euro zone, International Mid Cap Value, International Small Cap Value, International Mid Cap Growth, International Small Cap Growth and International Large Cap Value style funds. We also generated buy orders for global corporate dividend funds in two of our income strategies.

There remains substantial cash in reserve in all portfolio strategies should the uneasiness of the markets continue. The cash reserves provide cushioning during the early part of declines and then is used with great discretion to accumulate share inventory as more substantial discounts appear.

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