Market and Economic Update

Just weeks after the Dow Jones Industrial Average (DJIA) reached a record high, the S&P 500 closed at a new high of 1,569.19 on Thursday, March 28 – four points above its previous record of 1,565.15 back in October of 2007. The index remains short of its all-time trading high of 1,576.09.

 

[CLICK HERE to read the article, “Standard & Poor’s 500 index closes at a record high, beating October 2007 mark,” at StarTribune, March 28, 2013.]

 

[CLICK HERE to read the article, “S&P 500 Milestone Has More Meaning than Dow Record for Many,” at The Wall Street Journal, March 28, 2013.]

 

While the U.S. continues to flirt with economic recovery, we’re being reined in by worries stemming from Italy and the rest of Europe – not to mention the latest debacle in Cypress. Investors continue to buy on weakness and the stock market has seen rapid inflows in the first quarter that rival the marked outflows of 2007.

 

[CLICK HERE to read, “Wall Street slips as euro zone concerns drag,” at Reuters, March 27, 2013.]

 

[CLICK HERE to read the article, “Investing: Funds soar in the first quarter,” at USA Today, March 28, 2013.]

 

Economic moves by the Federal Reserve – namely quantitative easing – continue to abate negative risks. The Federal Open Market Committee recently announced moderate economic growth in the wake of improving numbers in housing values/sales, a gradual decline in unemployment, and positive signs in personal income and savings growth.

 

However, until it sees significant improvement throughout the economy and the labor market in particular, the Fed reiterated its intention to continue the purchase of $40 billion of mortgage backed securities and $45 billion of Treasuries each month. It is maintaining a federal funds rate of 0% to 0.25% for “at least as long as the unemployment rate remains above 6.5%.”

 

[CLICK HERE to read the Federal Reserve Press Release from March 20, 2013.]

 

With market fundamentals improving, you may consider repositioning money to take advantage of gains. However, remember that an important element of successful financial management is to focus on your goals – both long and short-term.

 

Where you position money should be directly related to what you hope it will accomplish. We’re here to help you focus on goals. Please contact us to discuss what that means for you.

 

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The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.   

 

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