Pacific Wealth Management Market Comment

by Jim Kuntz on August 26, 2014

As our summer of 2014 winds down, we hope you have enjoyed some rest and relaxation with your family and friends, or are planning to do so before the daylight hours begin to shorten.

As anticipated, this year’s financial markets continue to be choppy. The increased volatility has been driven by a heightened level of nervousness as the U.S. Federal Reserve Bank continues to “remove the punch bowl from the party”, while winding down their monthly government bond purchases. If the central bank maintains the pace of bond buying reductions, the “Feds” will finish this latest round of Quantitative Easing, otherwise known as bond market manipulation, in October. Meanwhile, Wall Street and geo-political observers are closely watching the increasingly unsettled international hot-spots in Ukraine, Israel/Gaza, along with the civil wars in Syria and, again, Iraq. The significant threat from the radical Islamic Jihadists, ISIS, has ironically aligned the U.S. with Iran in supporting the Kurds of northern Iraq. In recent weeks, stock markets around the world gave back some of their earlier appreciation while government bond values moved higher, as more investment capital seek “safe havens”. Precious metal investments have been holding this year’s gains nicely. Despite these troublesome issues, U.S. stocks have recently bounced again and are now pushing all-time highs.

After last winter’s deep freeze and resultant negative growth in the first quarter, our U.S. economy rebounded sharply, growing nicely, in the second quarter. All eyes will be focused on the second half of the year to determine whether our domestic growth continues at a sustainable pace and supports the consensus seeing the U.S. economy gradually normalizing. The outsized recent stock market gains remain vulnerable if the economy stumbles. The instability in Ukraine and worries about Putin’s Russia may be contributing to a recent slowdown in the European recovery.

We remain firm in our conviction that prudent risk management is essential in these extraordinary times. Despite the roller coaster ride the markets have experienced, our financial portfolios are benefiting from our wealth preservation focused posture. The well diversified investments are strategically invested to successfully navigate today’s choppy seas.

Our sister company, Pacific Divorce Management, continues to raise our national profile as one of the leading experts in high-net-worth divorce consulting services. Our disciplined and professional process help parting couples manage the financial stress of divorce effectively and start fresh, while providing clarity for their future.

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