san diego wealth advisor

Financial Market Comment

by Jim Kuntz on January 19, 2016

We hope you and your families had an enjoyable holiday season and were able to find time for some relaxation and fun.

The financial market volatility in 2015 was challenging, but the start to 2016 has been decidedly worse. Stock markets around the world have declined sharply to begin the year with multiple triple-digit down days. The recent steps by the People’s Bank of China to devalue their Yuan (Renminbi) currency, along with the slowdown in China’s rate of growth, have sparked concerns China will drag the world economy into recession.  The disarray in the Chinese stock market largely overwhelmed a better-than-expected jobs report here in the U.S.A. Our strong employment report reaffirmed the outlook for steady U.S. economic growth, even against the backdrop of global uncertainty.  As we expected, energy prices have moved lower, but our research continues to forecast higher oil and gas prices over the next couple of years.  The world today is spending $2 Trillion less on oil and gas than it was two years ago. Lower energy prices have historically been a positive for consumer service-focused economies, like the United States’, and savings on energy costs are likely to encourage consumer spending and future growth.

The stock market’s decline has been driven by concerns regarding the recent spate of contradictory economic data. This has precipitated an extreme level of negative sentiment. While China has been the focus of investor anxiety, many short-term traders have extrapolated some of the negative news to conclude a Chinese recession is imminent. The Chinese government is transitioning from a nation with under-developed institutions to a market-based system more reliant on consumer-oriented growth.  It is unlikely the communist Chinese leadership will not employ every tool at their disposal to maintain a growing economy. As their policies mature and investors gain confidence that 1.4 Billion Chinese consumers are on sound footing, global markets can begin to recover from the year’s early losses.

The news that global growth is slowing, along with the financial market turmoil, lessens the likelihood Janet Yellen and the U.S. Federal Reserve Bank will raise interest rates aggressively in 2016, as they had indicated just last month. The removal of this interest rate uncertainty should be a positive for the markets.

For some time we have been concerned about the potential for a stock market decline like the one we are experiencing. This outlook led us to under-weight stock allocations in our diversified portfolios to effectively weather this volatility. Unsettled markets like these will create opportunities for the cash we have recently raised. As always, the preservation of our client’s lifestyle and wealth, over the long term, remains our focus.

Market Comment

by Jim Kuntz on December 8, 2015

We hope you enjoyed your Thanksgiving holiday and have plans for more fun, rest and relaxation as the holiday season continues and 2015 winds to a close.

This year has been challenging for investors as nervous financial markets continue experiencing uncomfortable levels of volatility. Declines in stock market values over the summer were initially precipitated by the ongoing Greek debt crisis and their third bailout in five years. However, it was China’s surprise devaluation of their currency, the Renminbi (a.k.a. Yuan) that roiled financial markets around the globe.  Despite the market’s initial concerns regarding China’s slowing growth rate, our research suggests the world’s second largest economy is not headed toward recession and will continue as a positive driver of global economic growth in the years ahead.

After a rough summer, stock markets bounced in October and November. With the continued improvement in the American labor market, the first interest rate increase from Janet Yellen and the Federal Reserve Bank finally looks imminent.   The “Fed” boosted investors’ confidence last month when they said the United States central bank would move cautiously with the pace of future interest rate increases, as they attempt to normalize rates. We expect the U. S. economy will continue growing slowly in 2016 with improving domestic consumer spending offsetting a mixed industrial production picture.  While the human costs of the tragic terrorist events in France, Mali and San Bernardino are staggering, they are unlikely to significantly affect economic trends and longer term financial markets.

Financial portfolios around the world have been hampered by declines in commodity prices.  Although these prices can move lower, we believe the very large majority of their decline has occurred. Lower energy prices have historically led to periods of improved economic growth, as we experienced in 1981-82, ’86, ’08 and again in 2011. Pacific Wealth Management portfolios remain broadly diversified with a combination of growth, fixed income and alternative investments designed to complement one another over market cycles and positioned to meet clients’ long term goals and objectives.

Cheers to a happy and healthy 2016!

Wishing you and your family best wishes for a warm and joyful holiday.

Pacific Wealth Management Market Comment

December 23, 2014

Last December, Ben Bernanke announced the Federal Reserve Bank would begin winding down their latest and largest round of U.S. Government bond market manipulation, before 2014’s year-end. This created considerable nervousness for investors as American stock market performance had clearly become dependent on the controversial policy. As we highlighted in previous posts, our central bank […]

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News from Pacific Wealth Management

November 25, 2014

DEL MAR, CA, November 25, 2014 – Pacific Wealth Management®, a Del Mar, CA-based independent wealth management firm providing investment management services to preserve and grow wealth, is pleased to announce another successful and sold-out National Multiple Sclerosis Society Dinner Gala Auction on November 22nd. This 28th Annual MS Dinner Auction raised more than $500,000 toward creating a world […]

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James Kuntz is Once Again Named One of San Diego’s Top Wealth Advisors

March 27, 2014

Pacific Wealth Management’s James Kuntz is once again named one of San Diego’s Top Wealth Advisors. Online PR News – 27-March-2014 –James Kuntz, CIMA®, Managing Director of Pacific Wealth Management®, an independent boutique wealth management firm that provides investment management services to preserve and grow wealth, once again, has been named a Five Star Wealth […]

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