update on the investment markets - cfa institute · 2q 4q. 6/2/2016 s&p vs. the sellside...
TRANSCRIPT
Update on the Investment Markets
Jeff T. Zipper, CFA, CMT, CFP - Managing Director Investments, Florida
Presented on: June 15, 2016
CFA Society South Florida
Presented by:
Presented to:
Major Pullbacks During Current Market Cycle
Sources: FactSet Research Systems, Standard & Poor’s, J.P. Morgan Asset Management. Data: 12/31/15.
When Volatility Is Up, Stock Returns Are Low
12-month equity market total returns and volatility
2011-2015
Source: Blackrock.
VOLATILITY IS CHEAP but RISING
Source: StockCharts.com
S&P MAJOR REVERSAL
Source: StockCharts.com
Remember, It’s Time In The Market —Not Market Timing
S&P 500 Index Performance
(1985-2015)
Source: Columbia Thread Needle Management. Data: 1985-2015. The S&P 500 is an unmanaged investment, not available for direct investment.
Average annual total return represents the annualized total return including reinvestment of dividends and gross of fees.
What Happens To Stocks When Rates Rise?
Source: FactSet Research Systems. Stocks=S&P 500 (1970-1978), Russell 3000 (1979-12/31/14). Bonds=Barclays U.S. Aggregate Bond Index.
Time to
initial Fed
funds rate
hike
Rate at 1st
hike
First 3 months First year Five years annualized
Stocks Bonds Stocks Bonds Stocks Bonds
May 1971 4.2% -7.3 -1.5 13.3 7.8 3.8 6.6
May 1977 4.7% 1.6 2.1 6.6 2.4 9.7 4.6
Aug 1980 9.0% 7.7 -5.7 6.0 -3.6 14.0 14.7
May 1983 8.6% 2.0 -3.5 -7.1 0.4 12.6 12.0
Nov 1986 6.0% 11.5 3.2 -7.6 1.8 11.5 9.4
Apr 1988 6.6% 6.6 1.2 22.0 7.9 14.6 11.3
Jan 1994 3.0% -3.8 -2.9 -0.7 -2.3 22.3 7.1
Jul 2004 1.0% -1.9 3.2 16.9 4.8 0.4 5.1
Purchasing Power
Source: Financial Times (4/15/15), Haver Analytics, Citi Research U.S. Equity Strategy, Bloomberg
Where Can We Find Value?
Source: Standard & Poor’s, Compustat, FactSet Research Systems, JPMorgan Asset Management
U.S. Equites Offer More Risk Than Reward
Source: BCA Research, Thomson Reuters; IBES
Regional Equity Fund Flows
Source: Business Insider (10/22/15)
Money rushing out of U.S. stocks for 10 years
Take A Hike
Source: The Economist (3/21/15), U.S. Federal Reserve
10 YEAR YIELD AT SUPPORT
Source: StockCharts.com
Negative Yields?
Source: Bloomberg. Data through 3/31/15.
Global yield curves
DOLLAR REVERSAL
Source: StockCharts.com
OIL LOOKING GOOD
Source: StockCharts.com
GOLD IN REPAIR
Source: StockCharts.com
Election Year Seasonals Peak In July
Source: Strategas Research
6/2/2016
Historical S&P 500 Seasonal vs. Open Election Year Seasonal
All Years
1QOpen Election Year
3Q
2Q 4Q
6/2/2016
S&P VS. THE SELLSIDE
S&P 500 vs. Sellside Strategist Survey
Sellside Average, 2154
S&P 500
The average year-endS&P target among 20sellside strategists is
currently 2154.
Source: Strategas Technical Analysis
Conclusion:
2016 year-end GDP growth: 2.0%-2.5%
2016 S&P 500 Target: 2,100 (18x
estimated earnings of $117)
Bullish/Bearish range 2,200-1,900
Equities: Overweight
• Domestic Equities: Overweight
• Foreign Dev Equities: Overweight
• Emerging Mkt Equities: Neutral
• Hedged Equities: Overweight
Jeff T. Zipper, CFA, CMT,CFP
Managing Director- Florida
As a Managing Director for The Private Client Reserve of U.S. Bank, Jeff manages the investment function for the state of Florida. He also works with private clients delivering expert investment services and portfolio management to help those clients work toward their goals. Jeff establishes an integrated investment approach, offering strategies for goals based on short- and long-term financial objectives, financial status and risk profiles.
Jeff began his career in the investment management industry over 25 years ago in New York City. Prior to joining The Reserve, Jeff worked at PNC Wealth Management as a senior portfolio manager. In addition, Jeff was strategy head/portfolio manager of the mid cap growth product (using fundamental & technical analysis) while at SunTrust. He has spent much of his career in wealth management providing value and sophisticated solutions to high-net-worth clients in securities analysis, brokerage, and portfolio management. Jeff has been published on Wall Street, interviewed by the media and guest speaker at national conferences to share his investment expertise.
Jeff is active in the community, serving on the Board of Directors – Palm Beach County Sports Commission (chairing 2 committees), Former Board of Directors – CFA Society of South Florida, and Founder/Former Chair of South FL Market Technicians Association, and member of CFA Institute, NYSSA. Also Jeff has been awarded the Lois Kwasman award for community service, twice.
Jeff T. ZipperDirect:561.653.3352 Fax 561.659.4667
M.B.A., Suffolk University, Sawyer Graduate School of Management, Boston, MA
B.A., State University of New York at Albany
Chartered Financial Analyst (CFA)
Chartered Market Technician (CMT)
Certified Financial Planner (CFP)
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