On October 30, 2014 the Federal Reserve announced the end of their quantitative easing program and bond purchases which was designed to keep interest rates low and stimulate the economy. This action, along with recent data indicating that our economy’s growth is accelerating, could result in interest rate increases in the near future. Some estimates indicate that this could happen as early as the 2nd quarter of 2015.
Throughout most of 2014, we have positioned our fixed income portfolio in short duration bond funds and other income assets to protect client assets from falling prices due to potentially higher interest rates. This strategy reflects our policy of managing risk first and return second.
In order to better understand how bond prices could be affected by increasing interest rates, we have attached an educational “whitepaper” on bonds. You may access this report at the following link:
As always, please feel free to contact us if you have any questions about this report or any other investment topics.
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Frank Ragonese, Ph.D. – Founder & CEO
Gary Medley, CFP – Chief Investment Officer
Pelican Wealth Advisors, LLC
27499 Riverview Center Blvd
Bonita Springs, FL 34134
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
Diversification does not guarantee profit nor is it guaranteed to protect assets.The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.The Dow Jones Corporate Bond Index is a 96-bond index designed to represent the market performance, on a total-return basis, of investment-grade bonds issued by leading U.S. companies. Bonds are equally weighted by maturity cell, industry sector, and the overall index.The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index.The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.Google Finance is the source for any reference to the performance of an index between two specific periods.Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.Past performance does not guarantee future results.You cannot invest directly in an index.Consult your financial professional before making any investment decision.Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.By clicking on these links, you will leave our server, as they are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site.