· Market predictions wrong….This interesting article (link below) discusses the
fact that so many market pundits who have been repeatedly calling for a massive
stock market correction have, at least so far, been consistently wrong. In
fact, some have been wrong for years. Marc Faber and Noriel Roubini come to
mind on this latter point.
What’s the point? Forecasting the stock market is pretty much a futile if not impossible
exercise. There is no one we are aware of who has been able to forecast the
market on a consistent basis. The stock market
is driven primarily by the direction and strength of corporate earnings. The
rise in the stock market over the past five years primarily reflects the rise
in corporate profits and the low interest rate, low inflation environment. The
key point for wealth management is not so much trying to predict the direction
of the market, but rather 1) having a properly diversified portfolio which
helps to mitigate market volatility, 2)having a sound fundamental basis for
one’s investments and investment strategy, 3) sticking with a disciplined plan
that obviates the need or temptation to time the market. Over the long term, a
properly diversified portfolio should deliver superior risk-adjusted return,
which is a paramount objective in wealth management. Link: http://money.msn.com/investing/why-all-the-correction-calls-have-been-wrong
· Factory sector orders healthy….April factory orders again rose, making the third
straight month of increased factory orders, and exceeded economist forecasts.
Both new orders and order backlog rose for the third straight month. New orders
ex-defense and aircraft declined 1.2%.
What’s the point? It is positive that overall factory orders rose again in April. It is a
further indication that factory activity is recovering from the recent severe
winter impact. The continued improvement in factory activity reflected in new
orders is positive for the economy and supports our belief the pace of economic
growth should accelerate this year. Link: http://money.msn.com/business-news/article.aspx?feed=OBR&date=20140603&id=17671005
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