March 2016 Advisory Commentary

The month of February was one of the calmest months we’ve seen in a while, with the S&P 500 and Russell 3000 both finishing only slightly red for the month. This is officially the first three-month losing streak since late 2011. This is the first time that December, January, and February all saw consecutive drops since 2008. Looking at history, this is only the sixth time since 1950 that those three historically bullish months were all lower. The average returns the rest of the year after this happens is 4.9% with a 6.5% median return. February might not have finished green for the month, but it did close more than 6% off its lows near the middle of the month. Strangely enough, when you consider January did the same thing, this is the first time two consecutive months closed more than 6% off their monthly lows since October and November 2011.

Earnings season finished up with more of the same mildly negative to mildly positive news. No immediate catalyst seems to be on the horizon to lift corporate sentiment back into full growth mode, as companies continue to deal with the stronger dollar and both domestic and international economic weakness.

At this point, we seem to be in a bit of a no-man’s land of weaker (but not Terrible) growth indicators and lower (but not none) central bank stimulus and currency intervention. While volatility has dampened a bit, we’ll continue to wait and see if the markets can turn over a new leaf and regain a more growth-oriented footing.

Of course, with election season now in full-swing, we will soon have an entirely new variable to consider in our investment decisions…

Brian Weckman, RFC
Chief Investment Officer
Actis Wealth Management L.C.