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Midyear Recap

The commentaries are in – July brought with it a host of analysis about how the economy is doing so far this year.

 

According to Fidelity Investments, “The U.S. remains in a mid-cycle expansion and the corporate sector remains solid, but improvement has slowed, and global and policy risks dampened the overall outlook for riskier assets.” Its 2nd quarter report provides a market summary with analysis on the economy, policy risks, securities markets both domestic and abroad, and asset allocation themes in light of this being an election year.

 

[CLICK HERE to read, “Quarterly Market Update,” at Fidelity Investments, Second Quarter, 2012.]

 

If you want to see how the outcome of the presidential and congressional elections may impact the market and the economy, check out an in-depth perspective from LPL Financial Research. Among other observations, the firm’s 2012 Mid-Year Outlook states that, “We believe the impact of congressional elections may be more meaningful than the presidential one this year.”

 

[CLICK HERE to read the commentary, “Campaign 2012: What the Elections Hold for Investors,” at LPL Financial, Second Quarter, 2012.]

 

In its third quarter overview, UBS acknowledges that the “re-flaring of the eurozone sovereign debt crisis, continued policy uncertainty in the US, and the lagged effects of the monetary tightening cycle within the emerging markets are chiefly responsible for the current economic slowdown.” However, it cites the following reasons for optimism:

 

·         Lower energy prices are likely to start turning into a supportive force for growth.

·         Emerging markets policies are now accommodative; policymakers have greater latitude to ease policy; and further stimulus is likely in the months ahead.

·         The recovery in U.S. housing prices and the rebound in both existing home sales and housing starts suggest that residential real estate has shifted from being a headwind to a tailwind.

 

[CLICK HERE to read the commentary, “Investment Strategy Guide: I know what you did last summer,” from UBS Wealth Management Research, Third Quarter, 2012.]

 

Speaking of residential real estate, Zillow.com recently published a report emphatically stating that the US housing market has finally turned a corner. The Zillow Home Value Forecast estimates that 67 of the 156 markets it covers will experience an increase in home values over the next 12 months.

 

The report notes that, overall, national home values are back to January 2004 levels, having fallen 22.9% since their peak in May of 2007.

 

[CLICK HERE to read the article, “Home values rise for the first time in 5 years,” at CNNMoney, July 24, 2012.]

 

[CLICK HERE to read the commentary, “Housing Market Turns Corner; U.S. Home Values Post First Annual Increase in Nearly Five Years,” at Zillow Real Estate Research, July 23, 2012.]

 

[CLICK HERE to read the commentary, “U.S. housing market lays new foundation,” at The Globe and Mail, July 24, 2012.]

 

Despite lingering high unemployment and the risks associated with Europe’s financial crisis, there is little news in recent mid-year reports that would indicate the U.S. economy has altered from its slow but gradual course to recovery. Now might be a good time to take a look at your current situation to see if there are strategic moves you can make to help position your assets for longer-term growth – or protect them from a similar economic setback in the future. As always, give us a call if you’d like to discuss your situation.

 

 

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The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.