(513) 794-2870 | Fax (513) 273-0246

8040 Hosbrook, Road, Suite 220 Cincinnati, OH 45236

 

March 2018 Market Review

It was a down quarter / year-to-date for almost every asset class. For US equities, only growth stocks held on to their gains with large growth up 5%, mid growth up 3.3%, and small growth up 3.4%. Small value was down the most at -5.2%, followed by large value -3.1%, and the best performing US value asset class was mid value at -1.6%.

The S&P 500 is down .78% year to date. A market correction is a decline of 10% from the all-time high. The S&P 500 was in correction territory on February 8th ; down more than 10%. It then rose out of correction the next day. Seemingly, crisis averted. But then we have to wonder what the volatility in the market price means. Like the painting of the sun Ben Franklin observed at the constitutional convention, it is difficult to determine if the market is going to rise or fall. There is no doubt that headlines affect the market price: Greek debt crisis, Brexit, possible trade wars, etc. However, we remain disciplined with the asset allocation strategy, rely on fundamental economics to guide us, and the fundamentals are still very good. There are stocks that are overvalued (Facebook and GE come to mind) and that can cause investors to worry and drive other stock prices down. But we seem to hit a floor each time. We believe that floor represents the impact of low unemployment, low inflation, and GDP growth.

The Fed raised short term interest rates another .25%. Equities have traditionally done well during rising target interest rates. That is because the Fed raises interest rates AFTER the economy shows it is doing well enough to handle the added strain. The Fed is acting like it is playing catch up.

International equities were relatively flat. International developed was down 2.2% and emerging markets held on to its gains, up .9%. We still believe the fundamentals are strong for these markets, too.

During market volatility, fixed income provides relative price stability and liquidity while reinvested dividends and interest are deployed at lower prices. Those are two of the benefits to a disciplined allocation strategy.

Recent Blog Post: 
  • 04/02/2018

    It was a down quarter / year-to-date for almost every asset class. For US equities, only growth stocks held on to their gains with large growth up

  • 03/22/2018

     

    • Since 1950 there have been 59 different 10 year periods (rolling periods). The S&P 500 has produced a positive total return
  • 03/15/2018

    3/15/2018 The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in February on a seasonally adjusted basis after rising 0

  • 03/07/2018

     

      1.Returns for 10 year time horizon:

    • Global Equities: 3.9% total return (due to
  • 02/26/2018

    For at least the second January in a row, we can report a strong market, strong economy and good prospects for the new year. Unlike last January,

  • 01/02/2018

    The second longest bull market in American history continues. In a couple months we will mark the 9th anniversary of the low point for

  • 12/19/2017

    The US market seems to be excited about corporate tax cuts and is charging ahead. Interestingly, value stocks kept up with growth over the past

  • 11/02/2017

    US economic growth recorded its second straight quarter of 3% GDP growth, earnings are beating estimates, interest rates and inflation are low. It

  • 10/04/2017

    It was a great three months for equity markets. International stocks continue to shine. Emerging markets increased 7% for the quarter and are up

  • 09/05/2017

    The US economy is still strong. Jobs are growing, unemployment is very low partially due to the historically low labor participation rate,

  • 08/02/2017

    US sectors Financials, Healthcare and Technology continue to drive the returns for US growth stocks. Consumer stocks and energy stocks are lagging

  • 06/05/2017

    US growth equities continue to rise for the year. US value equities are barely breaking even. The growth equities are up mid-single digits for the

  • 05/02/2017

    Two groups have done well this year: mega caps (like members of the Dow Jones Industrial Average) and lower profitability growth companies (per

  • 03/07/2017

    Looking back it’s been a good couple of months and quarter (Dec – Feb). US growth equities are beating their value

  • 02/03/2017

    The consistent performance of US small cap equities and to a lesser extent value stocks (all sizes) has aligned the returns for the quarter and

  • 01/03/2017

    The year and the quarter come to a close and if you look at the one year returns it looks very orderly but we know it wasn’t.  All the US equity

  • 12/08/2016

    GDP for the third quarter was revised up from 2.9% to 3.2%.  Unemployment is below 5%.  Initial jobless claims have been below 300,000 for the

  • 12/08/2016

    Portfolios allocated across several asset classes held on to their year to date gains and in all but the most conservative case have exceeded the

  • 10/05/2016

    Value investing continues to lead the way for US equities.  Large cap growth is the laggard so far this year and this may be the first year in

  • 10/05/2016

    August was hot outside but the equity markets were only lukewarm. The reversion to longer term performance averages continues which means value

  • 08/01/2016

    If you could avoid the daily news and market fluctuations, it was a good quarter.  It was good even if you did follow the news.  It just may not

  • 06/23/2016

    Value equities especially US continue to outperform growth equities. Large value is up 6.8% year-to-date vs. -2% for Large growth.  Small value

  • 05/23/2016

    Consumer Price Index – April

    The consumer price index for April (released May 17th) showed a .4% increase in

  • 05/02/2016

    US value equities have now consistently outperformed their growth brethren this

  • 04/05/2016

    If emerging markets could speak, they might be saying, “I told you so.” MSCI Emerging Markets Index has been at the bottom or next to the bottom

  • 03/17/2016

    Wednesday, March 16th was a big day for macroeconomic news.  The Consumer Price Index (CPI) also called the headline inflation rate was

  • 03/07/2016

    US value stocks have continued to outperform their growth counterparts this year but it is masked by the fact that all US equity asset classes are

  • 02/01/2016

    January was a wild month in the equity and bond markets.  There are many wild predictions being thrown around both optimistic and pessimistic.  

  • 01/22/2016
     
    As we write this, the S&P 500 is climbing again. Its price is within a couple points of an all-time high set on February 28,
  • 01/04/2016

    2015 In Summary

    As we scan the four pages of year-end 2015 index returns that Morningstar generates, we see one US

  • 12/02/2015

    Following a mid-month decline, U.S. equities rallied to end November in the black, as both the Dow Jones Industrial Average® and the S

  • 11/05/2015

  • 11/02/2015

    U.S.

  • 10/05/2015

    The US equity market has started the recovery process from the correction which began

  • 09/14/2015

    FYI, 3rd quarter estimated tax payments must be postmarked by tomorrow, 09/15/2015.

  • 09/01/2015

     

    Last week’s market volatility offered investors

  • 06/01/2015

     

    On a rolling

  • 03/06/2015

     

    Stocks are again near record highs after a dismal January, echoing 2014. The U.S. economy remains in growth mode despite a decline in the

  • 02/04/2015

    January 2015 is now in the books.  Let’s reflect on the beginning of the year.  For portfolios, it was bad for equity prices and good, not great,

  • 01/13/2015

    The foundation of personal finance is saving. Specifically, we mean the establishment of an emergency fund.  In order to guarantee that this key

  • 08/20/2014

    Inflation is not dead!

    But it isn’t grabbing headlines, either.  The Bureau of Labor Statistics of the Department of Labor released the

  • 07/30/2014

    I had a professor at the University of Georgia who taught business law.  We learned enough to be dangerous and know that we needed a lawyer to