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BAM MARKET WRAP
February 27, 2015
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MARKETS ARE THAWING
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WHERE WE HAVE BEEN 

After a frigid and brutal January, the markets surged back in February, posting one of its best months in several years.  Year to date, the S&P is up 2.5% and has broken out of the trading range that we have highlighted for the last few months.  After a run up over the last three weeks, the market took this week to consolidate those gains and has mostly moved sideways.  That is a very good development and should set the stage for another move up.  Typically, the end of a month and beginning of a month are among the strongest periods as new money moves into the market from retirement plans and monthly paychecks.   There was a dramatic shift in favored sectors over the last month with real estate, utilities, and other interest sensitive sectors taking it on the chin.  The beneficiaries of the shift included risk assets like technology, consumer discretionary, financials, etc...

 

    

WHERE WE ARE HEADED 

 

With the market consolidating this week, the stage is set for another push upward next week.  While there remain many concerns about the economy, Europe, Iran, ISIS, Fed policy, partisan politics - to name just a few, the fact is that the market is trending up.   It is more important to see the change in environment than to understand it.  March continues as a historically favorable market period.  Absent an external surprise, the markets have much momentum that should continue to push upward and onward.  The bull market is long in the tooth but appears to have some more life.  That said, complacency is never a good thing and with most market pundits predicting higher and higher prices there remain many cracks below the surface.  Despite our expectation of higher prices, we continue to be vigilant knowing that in a complacent and mature bull market, selling could accelerate quickly given the right tinder.  


 

HOW WE ARE DOING

 

We have made a dramatic shift in our holdings over the last month reflecting the shift in the markets.  Our holdings in January that protected and even gained in the month, turned sour in early February.  We exited our positions in municipal and treasury bonds and replaced with high yield bonds and sectors that are showing excellent relative strength.   Currently we are fully invested but will continue to look for opportunities and to upgrade to funds that show better prospects.   Currently all things look rosy but that can change on a dime so we continue to keep our eyes on the road.

 

 

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Tidbits
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AMERICAN WORKERS - The private sector (i.e., not owned or operated by the government) employs 84% of all workers in the United States as of 12/31/14 (source: Department of Labor). 

  

EVERY DAY - The total debt of the United States on 1/20/09 (6 years ago on President Obama's inauguration date) was $10.627 trillion.  The total debt of the United States on 1/15/15 was $18.080 trillion.  The increase of $7.453 trillion (over 6 years) is an average daily deficit of $3.41 billion (source: Treasury Department). 

 

PIECE OF THE PIE - Technology stocks represented 34.5% of the total market capitalization of the S&P 500 as of 3/24/00, i.e., at the index's peak before the dot-com bubble burst.  Tech stocks represented 19.7% of the S&P 500's market cap as of 12/31/14 (source: Standard & Poor's). 


HOOK 'EM - Texas added a net 1,236 new residents each day during calendar year 2014, i.e., 451,321 over the course of the year, bringing the state's population to 26.96 million, the 2nd largest state behind California.  The 1,236 per day is equal to a new net Texas resident every 70 seconds (source: Census Bureau). 

 

ALMOST A QUARTER - The economy of the United States ($17.54 trillion) represents 23% of the $77.6 trillion global economy (source: BusinessWeek). 

 

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While the markets have thawed, the rest of us are still clawing our way out of the ice and snow.  Tennessee has been hit hard by Tennessee standards.  I am ready for Spring!  The Nashville area had lots of snow followed by 2 inches of cold 35 degree rain.  The combination was not conducive to our roof as we experienced a fair amount of water damage.  I knew it was going to be bad when my parked truck slid off of the driveway into my neighbor's trees! Never a good thing to return to your car and see it is in a ditch.  It is hard to complain, though, as many got hit worse.  We were never without power and were well fed and warm.  For some, that was not the case, and we hope they get relief soon.  Warmer temps this weekend should help.  I am hoping that the market is the first glimmer of a Spring thaw.  We can only hope. 

 

Sam and Bo

 

 

 

 

 

 

 

 

 

 

 

 

Your financial partner for twenty years and counting because managing your money never gets old.

 

 

 

 

     

We continue to make posts to our blog throughout the week so check it regularly if you want to see our thoughts.  You can access it by following the link below.  

 

RECENT POSTS

 

 

 

THE GREATEST COMPLIMENT

 

In these uncertain times, a trusted financial adviser is more important than ever.  Whatever comes over the upcoming months and quarters, the markets are certain to have lots of volatility and wild swings.  Europe, the US economy and dysfunction in Washington, and continued trouble in Iran and the Middle East to name just a few.  If you have family, friends and neighbors that may benefit from our services, would you please forward this email and/or provide our contact information to them.  We purposefully do not spend time marketing our services so that we can devote all of our resources to managing your assets.  Thank you to all who have provided us referrals - it truly is the greatest compliment you can give us.      

 

 

 

 
BAM MARKET WRAP EXTENDED
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Remember to visit our blog for market comments and observations in between newsletters.  We try to provide a few comments in between newsletters and certainly when there is a particularly interesting market day.  You can access it by clicking here. 

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Sam Bills - (865) 525-1329

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Bo Bills - (615) 371-5928

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Published by Sam C. Bills, Jr.  Copyright � 2008 Bills Asset Management.  All rights reserved.

BAM Market Wrap is produced and distributed regularly via email by Sam C. Bills, Jr. of Bills Asset Management  3001 Flagstone Drive, Franklin, TN 37069 Phone (615) 371-5928 Fax (615) 250-4903 - www.Billsasset.com

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