- Products & Services
- Knowledge Base
PORTLAND, OR, April 22, 2015 /24-7PressRelease/ -- Ron Sloy is a Certified Financial Planner and Founder of Sloy, Dahl & Holst. Here is their 2015 First Quarter Market Review.
The first quarter of 2015 was relatively flat. Excluding dividends, the S&P 500 finished a mere 10 points higher. Without the outperformance from Apple and a handful of Biotech names, the NASDAQ would've finished nearly flat as well. Interest rates dropped, yet again, providing decent returns for fixed income investors willing to take on the spring loaded risks of longer durations. We continue to believe those risks aren't worth taking. Most notable, in our opinion, was the meaningful outperformance coming from international markets. This is a trend we believe will continue, and those who have become overly enamored with the S&P 500 are already beginning to take note.
Listed below are 2015's first quarter returns of five major indexes:
BarCap US Agg Bond +1.61%
S&P 500 +0.95%
Russell 2000 +4.32%
MSCI EAFE (Europe) +4.88%
MSCI EM (Emerging Markets) +2.24%
We continue to hold a neutral weight towards the Emerging Markets, and for the first time in over 5 years have an overweight position in Europe in our more aggressive portfolios. Valuations in Europe are extremely attractive, especially when compared to the U.S., and their recent adoption of Quantitative Easing (a stimulus program) only boosts the opportunity for continued outperformance from European stocks.
The Energy sector continued to struggle throughout the first quarter, as supply outweighed demand and a strong dollar pressured oil prices. The volatility in oil resulted in additional volatility for the stock market. Also, lower oil prices should have a significant negative impact on quarterly earnings reports from many companies within the Energy sector. However, don't let that mislead you. The significant decline in oil prices may be difficult for some companies, but it will act as a net windfall for the global economies. This is yet another reason to be attracted to European stocks, as Europe is one of the largest importers of oil in the world.
We continue to be cautious for our more conservative investors, protecting from potential damages that rising interest rates could cause. We also maintain an overweight position in Financials for that very same reason. The big banks are in an extremely strong position. They are now mostly removed from the backlash of the real estate bubble and have stronger balance sheets than ever before. Rising interest rates will act as an immediate bonus for these companies, as they'll be able to derive additional revenues from their Federally mandated excessive cash reserves.
We believe 2015 will prove every bit as volatile as last year. We're seeing some weakness in early earnings forecasts and those won't be helped by a surprisingly low March jobs number. However, we've had another year of extremely challenging winter weather which could be masking strength. We are continuing to see signs of wage growth, which is a very important factor for the bull market to press on.
We're confident in our current allocations, and will continue monitoring opportunities within the Energy sector and international markets. We expect interest rates to begin rising again later in the year and believe we're well positioned for that shift.
Thank you for your continued support.
Sloy, Dahl & Holst, Inc.
About Sloy, Dahl & Holst
Sloy, Dahl & Holst, Inc. is a registered, full-service financial advisory firm dedicated to our clients' financial achievement. As a boutique investment house, we tailor every investment portfolio we manage to meet each client's specific goals.
# # #