Moving into 4th Quarter 2016

4th-quarterAs we come closer to closing out September and running full speed ahead to the end of the year for the remaining 3 months, Gib and I are working diligently to determine the right moves we should make within each of our clients’ portfolios. As you are probably aware, we have purposefully positioned most of your equity assets with a bias towards dividend producing positions. We believe this has served us all well as money has come into these types of assets because Treasury rates continue to remain low and these investment types tend to have less volatility. Since January 15, we’ve been pleased with the returns we’ve seen in these areas. What we have been recently tracking are growth assets like healthcare, information technology, and consumer discretionary positions are we believe these are now gaining momentum. Dividend producing positions are a bit overpriced, yet still pay nice yields compared to 10-year Treasuries, but the returns are not what they were a couple of months ago.

We have spent a lot of time discussing with several fund managers and investment strategists about what growth assets we should be moving to. Most are hesitant about moving to riskier positions until the Presidential election has passed. There are too many unknowns about the 2016 election and many fear that markets could correct during this timeframe. John and I have met on several occasions about tactical moves and for the most part, we think we will hold where we are currently. We may make some minor adjustments buying slightly more technology in the next few days, but not the rotation we had been planning. Unless something unforeseen occurs, we will wait for the election to come and go before we make major changes.

This is all to say that Gib and I are actively managing the accounts and looking for opportunities. We are reviewing cash positions and having conversations of cash implementation. We are making moves now where we feel appropriate, but feel as company that staying steady over the next 45-60 days makes sense.

If you have any questions, please feel free to contact us.

• Investing involves risk including possible loss of principal. • The economic forecasts set forth in the letter may not develop as predicted and there can be no guarantee that strategies promoted will be successful. • The purchase of certain securities may be required to effect some of the strategies. • There is no assurance that the techniques discussed will be suitable for all investors or will yield positive outcomes. • Investing in specific industry sectors may be subject to greater volatility. • The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time. • Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.