Tag Archives: global market

Foreign markets are soaring

The US markets are reaching new highs daily and many investors are happy with the returns their portfolios have generated.  According to the Wall Street Journal the S&P 500 is up 13.9% year-to-date.

 But some foreign markets are doing even better.

For example, the Hang Seng (Hong Kong) index is up 29.4%.

Chile is up 28%

Brazil up 27.3%

South Korea up 22.1%

Italy up 16.4%

Taiwan up 15.8%

Singapore up 14.7%

As part of our asset allocation strategy we always include a foreign component in our diversified portfolios.  Over long periods of time international diversification has had a positive effect on portfolio performance.  That’s because the US economy is mature.  It’s harder to generate the kind of economic growth that smaller, newer, and less developed economies can generate.

There is, however, a level of risk as well as reward to global diversification.  It’s said that when the US catches a cold, foreign markets get pneumonia.

The U.K. market is up only 5.8% this year, Shanghai +9.1%, Mexico +9.5%, Japan +9.6% and France +10.3%.  It’s difficult for the average investor to do the research to pick and choose their own foreign stocks.  So it’s even more important when investing overseas to use experienced portfolio managers with years of experience and an established track record.

We have done the research and we choose the best mutual funds with experienced managers to give our clients exposure to foreign markets.

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The “Plow Horse Economy” Keeps Plowing

The stock market defied the bears again and rose despite mixed economic news. We are in the camp that believes that the economy and the market will continue its slow and plodding rise despite a brutal winter and government policies that make doing business more complicated.

That being said, we would not be surprised us if the stock market experienced a correction. In fact, we construct our portfolios with this possibility in mind. The world is full of surprises and events – either local or global – can cause a temporary disruption. One of the things that surprised many bond traders is that interest rates actually declined in the last year, catching many pundits off guard.

Moving ahead, conditions appear to favor actively managed portfolios. We constantly review our manager line-up and re-balance your portfolios on a regular basis to keep you – and all the rest of our clients – within the risk bands that you have established.

Year-to-date, most of the broad global market indexes are positive. In the U.S., the NASDAQ was the best performing stock index. Interest rates remain low by historical standards, meaning that money in savings and checking accounts is losing purchasing power. The rise of food and energy prices is causing a problem for those who bailed out of the market in 2008 and never re-entered.

If you have not yet visited our new website, please take this opportunity to go to www.korvingco.com and invite your friends to check us out. We welcome your comments and suggestions for ways we can be of greater service to you.

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