TGIF! November 20, 2015

Only a week after the horrific attacks in Paris, another Terror attack in West Africa occurred overnight proving  global violence is not going away.

The Market is taking the news in stride.  Stocks rallied this week, many ways in defiance of the Paris attacks, sending a message that Terror will not win out.  The Market celebrated, erasing last week’s pain with this week’s gain.  We are now just over a month away from 2016, and hitting the seasonal period which is historically kind to investors.  The S&P 500 is also butting up against resistance levels that have turned down stocks all year. It’s back near all-time highs.  We have bought the weakness and have plans to buy more. 2015 has been a stock pickers Market.  We expect 2016 to be the same.  We’re stock pickers.

Expectations are high for the announcement that Interest Rates will finally be allowed to rise to reflect normal market conditions.  Holding rates low for the past seven years has helped the US economy rebound, but it’s time to let it float according to supply and demand. Returning to normal, usually causes markets to rebound.

Interest rates have direct effect on all things financial: Consumers, Investors and Home Owners. The imminent move to higher interest rates, will stay low from a historical perspective.  Money is still cheap.  Both individuals and companies have swarmed the banks to lock-in low rates but banks are rejecting more loans than they are making.  In 2016, we expect banks to become more accommodating. We expect both technology breakthroughs and medical innovation to dominate headlines.

Investing is a marathon.  During the long race, there are times for sprints and there are times for pacing.  Right now we need to pace ourselves.  The time to sprint again is coming soon.  Rising interest rates will likely set the tone for the next few months.

Mike Frazier

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