Fagan Associates Commentary

Not so fast.
Doesn’t it seem like days (not months) that we were mired in the frenzied days of August. The market plunging, Europe crumbling and optimism nowhere to be found. The market was significantly lower and it was a GREAT time to buy. Or as we encouraged numerous clients “not a great time to sell”.
In 6 short weeks of 2012, the S&P 500 is up more than 7%. We encourage investors to stay the course with their assets allocated appropriately. We believe that stocks are the best avenue for growth over the coming 5 years but as we have frequently stated short-term movement is anyone’s guess.

Good Morning and congratulations to the New York Football Giants, Winners of Super Bowl XLVI!

On a business note and regarding the situation with Greek debt, a heard a commentator on a business network state (and I’m paraphrasing) that when an issue is around for awhile, it tends to be priced into the markets.  We agree completely.  Furthermore, at this time we believe that there will be more “knowns” than “unknowns” impacting stocks and bonds during 2012 as compared to 2011.  These knowns should lead to higher returns this year, as again compared to the prior.  At this time we will hold to our earlier forecast of upper single-digit total returns this year.  That said, the stock market has run more than 20% over the past five months or so and is due a warranted and beneficial breather. 

Regarding fixed income (bonds), stay with corporates and stay with intermediate bonds.

Good Morning!  Stocks moved higher last week, thus adding to gains already recorded during January and look to open higher this morning.  After the robust gains recorded during the fourth quarter of 2011, one would think that they would pull back during January.  This did not happen and that would be considered bullish.  All that said, we are entering earnings season.  We will see if the stock market can hold these gains through this period.  If so, then the balance of Q1 should be positive. 

Hard to find value on the fixed income (bond) side.  Rather than using all conventional bonds, we would prefer, adding some high dividend paying common and preferred stocks along with bonds.

By the way, wiht all the snow, sleet and freezing rain out there, at least here in the Capital District, drive safely.  Can’t believe it’s January 17th already.  Winter will be over before we know it.

Good morning.  Stocks shot higher this past week as investors focused on the good economic news that was released pertaining to the United States while ignoring the longer-term problems faced by the European Community and even somewhat here in the U.S.  We believe, although ripe for a pullback, stocks should retain their mid-term upward bias as indeed the economic news is getting better for U.S. citizens and we are continuing to work through weakness in the labor and housing markets.  Look to buy on weakness.

Regarding fixed income (bonds), we continue to like high-grade corporate bonds and U.S. government agency bonds with a 5-10 year maturity.

Happy New Year!

From all of us at Fagan Associates, best wishes to all for the very Merriest of Christmas and Happiest of Chanukah Seasons!  May you find peace and happieness in your life.

The credit ratings agency, Standard & Poor’s placed fifteen of the seventeen member countries of the European Union on negative credit watch, this ahead of the European summit beginning Thursday, December 8.   S&P in essence is trying to apply pressure on the member nations, including France and Germany, to arrive at a credible plan in order to stem this liquidity and ulimately, solvency crisis.

The U.S. markets have been consistently ignoring Europe recently as economic data here has come in better than expected.  We would expect that after the run-up stocks have had recently and as this summit looms ever closer, investors will take a wait and see attitude.  That said, with the end of the calendar year approaching and with many insitutional money managers lagging in performance, there is pressure to get off the sidelines and into stocks.

We are comfortable with our approach, which is one of disciplined investing, attempting to buy at opportune times and allocating client assets according to their objectives, tolerance to risk, etc….

Good morning and Happy Thanksgiving! 

Economic data continues to point to a “muddling” U.S. economy, that is one moving at just a bit faster than stall speed.  The job market is so-so.  The housing market is so-so.  Unfortunately, a muddling economy can stall if it becomes negatively influenced by an internal or external event.  Namely, the European sovereign debt crisis.  We remain mildly bullish and would look to add to holdings, be they either mutual funds, ETFs or individual securities on pullbacks.  That said, the real potential for a contagion of the sovereign debt crisis certainly does worry us and therefore bears close watching.

Good morning!  Stocks are off to a sluggish start as the poorly subscribed Spanish debt auction (10-yr @ 6.975%) as well as a weak European Stock Market is more than offsetting better than expected Initial Claims for Unemployment in the United States as well as relatively good economic numbers over the past several days.  Europe is the driver, at least for the time being, which is why in our posts we have recommended adding to positions on weakness as we ultimately believe that the U.S. economy will decouple somewhat from the European economy providing an opportunity for growth.

Good morning.  Stocks are looking to open modestly lower after running up last week and more than ten percent since the beginning of October.  Europe appears to be moving in the right direction with former Vice-President at the European Central Bank, Lucas Papademos assuming the role of Prime Minister in Greece and former European Union Competition Commissioner Mario Monti, assuming that same role in Italy.  Finally, U.S. Economic Data remains steadfastedly positive, thus supporting stock prices here.

At this time, we believe that equity investors would be well served adding to their holdings on pullbacks as we are working through the economic malaise with, at least to this point, no contagion in Europe, no hard landing in China and continued modest growth in the United States.  Should we get our political house in order, the stock market would move substantially higer.

Happy Election Day!  Stocks look to open fractionally higher, this on hopes that the events surrounding Greek and Italian sovereign debt are worked out to the benefit of the E.U. and therefore the United States.  Regardless of where this ends up, Europe is in the process of cleaning its’ financial pipes, cleansing bad debt so that it can move forward.  It is a process that we began four years ago, albeit on a painfully slow and still precarious basis. 

What does this mean for the U.S. market?  Continued modest economic growth here at home that will help support equity prices.  However, substantial uncertainty remains.  Keep quality high.  Buy on weakness and retain some cash on the sidelines.

Don’t forget to vote.  That is our voice.