For Immediate Release
Lisa Thuer, Local Trading and Research Specialist, Participates in
Prestigious BlackRock Leadership Summit for Women Advisors
Palatine, Illinois, March 1, 2016 – Lisa Thuer, a Palatine, IL-based trading and research investment specialist at Kabarec Financial Advisors, recently participated in an exclusive Leadership Summit organized by BlackRock – the world’s largest investment manager – for leading female financial advisors.
At this distinctive two-day event, held February 10-11 in San Francisco, a select group of women-advisors met with top BlackRock investment professionals to discuss the outlook for investing in 2016, timely investment themes, and how to further empower women as leaders in the financial advisory profession.
“In addition to the opportunity to build my knowledge of how to help my clients make good investment decisions in uncertain times, the BlackRock leadership summit provided a unique forum for sharing insights with my peers regarding the experiences of women in financial advisory,” said Thuer. “The meeting gave me fresh appreciation of the strengths of women as financial advisors and renewed my commitment to supporting the advancement of other women in our profession.”
Speakers at the BlackRock summit included Hollie Fagan, head of BlackRock’s Registered Investment Advisors business; Martin Small, head of U.S. iShares, the firm’s exchange traded funds (ETF) business, and Susan Colantuono, CEO/Founder of Leading Women, a premier consulting firm supporting corporate initiatives to advance women.
For over 7 years, Lisa has been a critical member of the Kabarec Financial Advisors team. Her main areas of focus are placing all investment trades and maintaining the asset allocation to ensure our clients’ objectives and risk tolerance are reflected in their portfolios. As a key contributor in the firm’s investment committee, Lisa spends much of her time becoming aware of any news regarding our investments and the impact it will have on our portfolios as well as researching new investment ideas.
The path to reaching your financial goals will have low points and high points. It is essential to always look forward and ask for help when needed. At KFA we can help you understand the whole picture, helping you prioritize your goals and find your risk and reward balance in your portfolio. In the coming days we are looking to add further diversification to most of our portfolios. We are analyzing dividend payers that operate as islands of calm in a volatile market. Most portfolios have already added alternative investments and dividend paying stocks. We will continue to seek quality investments over all else in this era of volatility. Should you have any questions please feel free to contact us.
An oily arrow from Cupid struck the market today as the DOW Jones Industrial Average finished up over 300 points. Oil and the market have been in lockstep this year, tripping and falling down the aisle in harmonious disappointment. Traditionally, market volatility blushes in comparison to oil volatility. According to Barclays, the correlation between oil and the market amount to 25% over the past two decades. In 2016, the narrative has been different as oil and the market have created a Thelma and Louise couple. Panicked investors are getting what they settle for as they drive off the cliff of sanity.
Ever since oil fell under $40 dollars per barrel in December the US equity market has been pushed downward. Investor confidence jumped off a cliff in holy matrimony with oil. Barclay’s 25% correlation number does not pertain to our current situation. The below graph illustrates how oil and equity prices have tangled downward, hand in hand, since December 7th. The contemporaneous correlation between Brent Crude Oil and the S&P 500 is unbelievably high at 91.39%, stunningly comparable to the correlation between US GDP growth and the S&P 500.
(Cumber Asset Correlation Group)
For the past two months, the market has endured an emotional correction. Retail sales in January were up, posting a third consecutive month of gains. When you exclude gas stations, retail sales have posted gains seven months in a row. Full-time employment grew by 2.5 million jobs as part time employment shred 120,000 jobs. The best news for a college student? There are 5.6 million jobs that remain unfilled in the US economy. The Fed targeted a 2% core inflation target and year to year we sit at 2.1%. Historically, GDP Growth and the S&P 500 have been the Romeo and Juliet of correlations. At KFA, not only do we endear classical beliefs about the economy but we also choose wisdom over short-sightedness.
Valentine's day weekend aside, we are keeping an eye on every economic indicator. The media has been spewing the word "recession" without first consulting a dictionary. A recession is defined as a fall in GDP growth after two successive quarters, our GDP has not experienced a fall since 2009. Nearly every economist forecasts a rise in GDP for the 4th quarter of 2015 and another rise in the 1st quarter of 2016. What we seem to be experiencing is an emotional correction and not a long term trend.
Winter is being felt all across America; particularly in Chicago where temperatures are in the teens. Heavy snowfall is possible from Atlanta to New York. In spite of the groundhog’s prediction, we may be in for a long winter. The market has almost been as unpredictable as the weather. Each and every morning we look for fundamentals, news, and the latest information to determine the best way to allocate your assets. KFA takes every effort to deliver the highest performance while balancing the risk of a fear driven market. Although we remain positive on 2016, we are currently plowing through a blizzard of emotional investing.
One of the top market forecasting groundhogs out there, Goldman Sachs, has abandoned five of six top recommended trades for the year[i]. There are a few other market groundhogs that have echoed negative sentiment, from the Royal Bank of Scotland to the doomsday forecasters who encourage you to buy gold now. At KFA, we are not investing in the shadows – we are looking forward to help you reach your long term goals. Goldman’s only remaining top recommended trade pits non-commodity companies versus emerging markets, which is the same conviction KFA has had since summer. None of our core portfolios are directly exposed to the energy sector and our international exposure has been around 1% since August. In the midst of groundhog discourse, prudence should be left to judge.
Other than your KFA team, there are several prudent and esteemed economists that support our positive long term outlook. Dr. Jeremey Siegel, a Chicago native and professor at the University of Pennsylvania, strongly believes the S&P 500 may earn as much as 10% this year despite near term volatility. Another noted economist, Dr. Robert Genetski, believes stocks are undervalued by up to 30% and that short term volatility does not compromise long term performance. When we experience turbulence in the market, we consult our team of doctors and work in a pragmatic way to enhance your long term performance.
Source: SentimenTrader as of January 15, 2016. SentimenTrader’s Smart Money Confidence and Dumb Money Confidence Indexes are a unique innovation used to see what the “good” market timers are doing with their money compared to what the “bad” market timers are doing. When the Smart Money Confidence Index is at 100%, it means that those most correct on market direction are 100% confident of a rising market. When it is at 0%, it means good market timers are 0% confident in a rally. The Dumb Money Confidence Index works in the opposite manner.
The trick for every business has always been to buy at the lowest price possible and sell at the highest price possible. There are several factors influencing the recent market downswing. On the forefront is oil, we are experiencing the biggest supply glut in US history and overblown recession fears hinge on oil continuing an almost never ending downward spiral. As we have mentioned before, demand will eventually meet supply and oil will find a bottom. OPEC nations have done everything they can to manipulate normal supply and demand conditions which has eroded the price of oil to historic lows and threatened the economic livelihoods of OPEC’s own members. On the horizon is the 2016 presidential election which means a new era of economic policy for the United States. There is no clear frontrunner and investor speculation is running wild based on the objectives of each candidate. In the near term, volatility will not end and to capitalize on market movement most portfolios have added an increased allocation in our market neutral fund. We will continue to watch over your portfolios with prudence and with an aim of long term performance. Should you have any questions or concerns you are always welcome to contact us.
We took two steps forward as we found our first positive week of the year but since Friday the market has taken a step back. The commodity sector is experiencing turmoil as historic lows have triggered a broader market meltdown in terms of investor confidence. Emotional investing is defining short term market movements. Think back to when you were learning how to drive, despite all the preparation and measures you took to pass the driving test you may have been caught off guard the first time you hydroplaned. At this very moment in time, the market is plowing through an oversupply of oil and some investors are losing control and crashing while others remain steady and firm on the wheel.
The good news is, the investment vehicle we are driving to help you reach your financial goals is fundamentally sound. Low oil prices have driven commodities to historic lows but that will change in time. Without doubt, there is cause for concern over an increase in oil companies defaulting. If more oil companies default, the spillover would adversely affect creditors and harm institutions as they are left holding the debt. The threat of a “one and done” federal interest rate hike for 2016 is another factor contributing to uncertainty in the financial sector. The market is reacting to shadows looming over us from the aforementioned past due threats. Poor emotional investing is only accounting for what is in the rear view mirror instead of what lies in front of us.
(CNN Fear & Greed Index)
Oil companies have adjusted to the current market climate and cancelled nearly $400 billion in energy projects. We forecast an increase in oil acquisitions as companies will be forced to sell assets and merge business to cut costs and survive amongst growing financial pressures. For small oil companies across the US, it is far better to merge with a larger company armed with more capital than to go bankrupt. This should relieve fear that financial institutions are in trouble for holding oil debt, as that debt is transferred from less viable companies to larger companies with greater liquidity and credit solvency. In 2016, the market has had its best days when oil looked poised to stabilize. If the Federal Reserve sees a stable and growing market they may again raise the federal fund rate which will add to the profitability on loans by financial institutions.
We enjoy a free market economy where oversupply has always been met with a slash in production. Years ago, we experienced an oil shortage which was met with more production until we found stability. Due to overproduction, the market is again seeking to find stability. In the meantime, your KFA team is not crashing your investment vehicle as we plow through oil puddles. We are presiding over all of our investment vehicles with caution and a steady hand to help you reach your financial goals.