Blog

The dynamics of this market year look to be some of the most interesting in many years.  Let’s take a look at some of the issues that may provide tailwinds to propel the markets forward as well as the headwinds that may restrict market progress.  We are unconcerned with politics since any major changes in the policies of a governing body throughout history will bring divergent rhetoric.  The winds of change can create extreme swings in our nation’s politics and policies.  The markets prefer smooth tailwinds in policy to aid in pushing the markets forward with occasional gusts to provide the volatility that creates opportunity. The goal is to stay focused on the health of our portfolios.

“Indecision may or may not be the problem”
Jimmy Buffett

The markets hate indecision and while good news is obviously preferable, it is better to know bad news and decide a strategy going forward than to remain in limbo.  Elections, interest rates, the future of the European Union, oil prices, quality of corporate earnings, trillions of dollars of corporate cash not deployed, staggering government debt, a stagnant line-of-credit system for small business, higher true unemployment numbers have all led the markets to stagnate.

While it is true that uncertainty is good for cable news and can drive the markets lower, it is also true that uncertainty creates opportunity.  As mentioned in our last market comment, “Bad news may move investments but uncertainty rattles the markets”.  We are pleased with our new investments following the “Brexit” vote as well as the trimming of long-held po

The Bottom Line

1. Today: “Brexit”- Britain Exits the European Union, Global Markets Fall

2. Affinity Capital Portfolios have averaged 50% in cash and fixed-income since the first quarter.

• Affinity Capital has viewed the markets as overvalued and unsteady and have been awaiting a catalyst to put funds to work. We will evaluate today’s market activity as well as news over the weekend that will affect Monday’s open.
• We have made some measured investments today and will continuously evaluate opportunities to incrementally invest portfolios.