Looking Back / Looking Forward

We are halfway through the year and only two of the world’s five main asset classes have made any money; US Stocks and Real Estate. World stock returns are down for Q2, and are up 4.7% for the year. The US is up 2.2% for Q2, and up 12.5% YTD. Healthcare, Consumer Discretion and Financials lead all US sectors for the quarter and the year. Small caps are winning the style box return race halfway through 2013.

There is still trillions of dollars sitting on the sidelines. When meeting with some referrals come in last week I asked them if they knew how much the market was up and how much of their portfolio was participating.  They knew it was up but had no idea how much and had no equities in their portfolio.

So where do we go from here? I always get a little nervous when people start asking me about the market and how much higher it will go. My immediate response is to ask if they are invested in the market. From my unofficial survey only 1 out of 3 has equity exposure. I would like to say to those who are not invested “Why do you care?” but I am a much kinder person than that. I really feel sorry for them because I can see the anguish on their face as they search for an answer from me. My usual retort is I do not predict but observe and if you would have bought the S%P 500 index on March of 2009 you would be up 134% approx…

The recent pull back over the last six weeks has brought valuations down enough that we are in an oversold area of the market. Since 1945 the market has corrected 5 to 10 percent every year for various reasons, so this one was normal with or without Bernanke telling us the economy was getting better. No one knows what the market will do for the remaining six months but my observations tell me we could very well be higher than we are now based on historical actions. Therefore, those waiting on assurances or the next correction to increase their equity allocations will remain as one of the 2 out of 3 who will be waving as the train leaves the station.



About billriley

Chief Executive Officer, Chief Compliance Officer A co-founder and shareholder, William Riley is a 33 year industry veteran, who observed, many years ago, that over time institutional investors typically outperform individual investors while accepting less risk. In his role as Chief Executive Officer, Bill works tirelessly to make the wealth management strategies used by the world’s wealthiest families and largest institutions available to our firm’s individual clients. Bill combines fundamental and technical analysis to minimize investment portfolio risk and maximize potential returns. He uses a variety of non-correlated asset classes, including alternative investments, to minimize portfolio volatility and seek absolute returns in down or flat markets. Finally, Bill believes in a comprehensive approach to wealth management that fully coordinates and seamlessly integrates portfolio management, risk management and asset protection, trust, estate, tax and charitable planning. Prior to co-founding Riley Wealth Management ,LLC, Bill held management positions at Merrill Lynch, UBS, Raymond James, Paine Webber and J.C. Bradford. Bill founded Fort Worth branches for Raymond James and J.C. Bradford. Prior to entering the financial services industry, Bill ran his families closely held businesses. Bill’s experience operating family businesses combined with his wealth management experience makes him uniquely qualified to advise entrepreneurs and business owners on a variety of matters including complex and sensitive issues relating to business succession. Bill’s degrees and designations included a Masters Degree in Business Administration (MBA), the Chartered Financial Consultant designation (ChFC), the Chartered Life Underwriter designation (CLU) and the Wealth Management Specialist designation (WMS). A Fort Worth native, Bill is a TCU alum and active in many civic and charitable organizations. Bill and his wife, Marsha, now reside in Colleyville, and they have four grown children and four grandchildren. When he is not working on portfolios or studying financial markets, Bill can be found on the golf courses of Ridglea Country Club.
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