Beacon Financial Strategies NC

First Quarter 2012 Market Review

In Investments, Market Review by Chip Hymiller

The January to March quarter saw the best three month performance in U.S. stocks since 1998.  In fact, the S&P 500 index advanced by nearly 13%, while the Dow advanced almost 9%.

Bond performance was positive, but much more subdued as the highest rated bonds managed to eek out gains of about 1% for the quarter.

So why is it that all of a sudden the financial markets, particularly stocks, seem to be performing well?  After all, what has changed in the last six months that would warrant a 26% gain in stocks as measured by the S&P 500?

To help answer this question, I think it is important to keep the following in mind:

  • At times, the financial markets trade on emotion.
  • The stock market is forward-looking, while most data is reflective of the past.
  • Markets tend to overreact on both the upside and the downside.

The fact of the matter is that since the debt ceiling debates in August, not much has changed.

Unemployment is still stubbornly high, economic growth is muted and there remains significant economic challenges in Europe.  We do not expect these issues to be resolved overnight.

However, regardless of what happens in the financial markets in the short term, it is our hope that our clients make continual and incremental progress toward their financial goals.  How is that possible?

Well, we believe it is possible by focusing on and adhering to a financial plan by:

  • Having a prudent investment and savings strategy that is based on your needs and risk tolerance.
  • Planning for unexpected events and thinking about contingencies.
  • Developing strategies to reduce your tax burden.
  • Leveraging available resources to maximize your financial strength.

We hope that you will not hesitate to contact our office should you have any questions.  Have a great spring!


Beacon Financial Strategies Financial Planning NC