July 2015 Monthly Outlook – “Crisis”

In the Chinese language the word “crisis” is composed of two characters, one stands for danger and the other opportunity. As we reach the mid-point of the year, we have certainly seen our fair share of “crisis” this year  – a significant slowdown in US economic activity early in the year, racial unrest in the US, terrorist attacks in Paris and Yemen, and the Greek debt default on 6/30/15.

Overall, the financial markets have reacted benignly, with both stocks and bonds little changed year-to-date. The initial response to “crisis” so far this year has been a shallow pullback quickly followed by a rebound.  Danger then opportunity.

I use a number of resources to guide my approach and actions as I manage investments.  As we move into the 2nd half of 2015, my outlook is most in line with that from BlackRock.  Here is a recap of their Mid-Year Update.

 5 Things to Know

  1. Central bank policies will diverge, with the Federal Reserve starting to raise interest rates while Japan, China and European Central banks will continue to be in easing mode.
  2. Federal Reserve will lift off (probably in September), and the World will not end.
  3. U.S. economy slow, but continues to move forward.
  4. Inflation still at low levels.  The US dollar should remain strong, putting downward pressure on inflation and commodity prices.
  5. With Fed in play, expect more volatility.

5 Things to do

  1. Favor stocks over bonds, but be choosy.  (stocks are less expensive than bonds on a relative basis)
  2. Look overseas for opportunities (Europe & Japan have outperformed U.S.  year-to-date)
  3. Watch your step in bonds (remember bonds lose value when interest rates go up)
  4. Resist the urge to exit  (American Association of Individual Investors – AAII – Bullish sentiment has declined to level not seen since Jan 2009)
  5. Seek growth in a low-growth world (asset allocation is critical)


These are the themes I am following as we start into the back half of 2015. As always I will be on the lookout to avoid danger and take advantage of opportunities.

July Calendar of Events   (comments and additions for future months are always welcome)

  • July is National Picnic and National Parks month – why not go to a national park and have a picnic – a 2 for 1

July 1st             Bureau of Internal Revenue (the IRS) founded in 1862– betcha nobody celebrates this birthday

July  4th             Independence Day

July 11th            my daughter Ryan’s birthday!

July 29th            National Lasagna Day

I hope this report is useful to you.   Feel free to share this information with family, friends and colleagues.

Sources: BlackRock, Yahoo Finance, Raymond James

Although information herein has been obtained from sources deemed reliable, its accuracy and completeness are not asserted. All opinions and estimates included in this report constitute the judgment of the financial advisor as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.


Investing involves risk and you may incur a profit or a loss. Diversification does not ensure a profit or ensure against a loss. There is no assurance that any investment strategy will be successful.  Past performance is no assurance of future results.


Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus containing this and other information. Read it carefully before you invest or send money.


Information provided should not be construed as legal or tax advice.  You should discuss any tax or legal matter with the appropriate professional.


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