Just weeks after the Dow Jones Industrial Average (DJIA) reached a record high, the S&P 500 closed at a new high of 1,569.19 on Thursday, March 28 – four points above its previous record of 1,565.15 back in October of 2007. The index remains short of its all-time trading high of 1,576.09.
While the U.S. continues to flirt with economic recovery, we’re being reined in by worries stemming from Italy and the rest of Europe – not to mention the latest debacle in Cypress. Investors continue to buy on weakness and the stock market has seen rapid inflows in the first quarter that rival the marked outflows of 2007.
Economic moves by the Federal Reserve – namely quantitative easing – continue to abate negative risks. The Federal Open Market Committee recently announced moderate economic growth in the wake of improving numbers in housing values/sales, a gradual decline in unemployment, and positive signs in personal income and savings growth.
However, until it sees significant improvement throughout the economy and the labor market in particular, the Fed reiterated its intention to continue the purchase of $40 billion of mortgage backed securities and $45 billion of Treasuries each month. It is maintaining a federal funds rate of 0% to 0.25% for “at least as long as the unemployment rate remains above 6.5%.”
With market fundamentals improving, you may consider repositioning money to take advantage of gains. However, remember that an important element of successful financial management is to focus on your goals – both long and short-term.
Where you position money should be directly related to what you hope it will accomplish. We’re here to help you focus on goals. Please contact us to discuss what that means for you.
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