Stop and Smell

the Roses

It's February, when romances blossom as do the over 250 million roses sold for Valentines Day. In fact, growers in countries like Mexico, Ecuador, and Columbia struggle to meet the demand for this universal symbol of love, which creates enormous volatility each year in the price of roses across the country. That said, we know this hasn't been the only volatility we've seen as of late. The equity markets also made many hearts flutter in January.

Using data provided by the St. Louis Federal Reserve, the Dow Jones Industrial Average rose or fell more than 100 points during 14 of the 19 sessions last month. Nine of the 14 were negative, while the remaining five saw the Dow finish higher.

The best and worst: An advance of 323.25 points on January 8 helped offset a decline on January 5 of 331.34.

Source: Wall Street Journal, MSCI.com

*Annualized

**USD

Investors are trying to digest a number of events, including the soaring dollar, falling oil prices, lackluster global economy, and more aggressive monetary policies from a number of central banks around the world.

I was fortunate this year to be in Pasadena California at the time of the Rose Parade. Actually, we weren't able to attend the parade itself but we were able to see the floats. You see, after the parade they line up all of the floats and, for a small fee, you're able to walk around and see them up close. I've seen the parade for years on television but found I never really fully appreciated or understood the immense amount of work that goes into building the floats until I saw them in person.

Similarly, I believe it's difficult for most people to fully understand the various ebbs and flows of the financial markets by watching commentary on TV. Scott's and my combined 40 plus years in the financial industry give us a good perspective of not only how market gyrations really affect various portfolios long-term but also what we can do to help mitigate the related risk. As we preach regularly, techniques such as proper diversification, rebalancing, dollar cost averaging, risk transference, and making sure each portfolio is aligned with each of our clients' stated goals, all help us to both manage risk and human behavior.

We are here to assist you. Please let us know if you'd like to discuss how market conditions might affect your portfolio and/or what strategies we can use to help you achieve your goals. 

Bill & Scott