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Interim 2016

Market Update

It is not uncommon to connect market fluctuation to the economy. Some believe that when markets are in a correction, we must be going into a recession. You may have heard the axiom, “economists have predicted 8 of the last 5 recessions?” I am including a chart that can help illustrate recent, historical perspective. As you can see, corrections happen often and don’t necessarily predict future activity. At the market low in March 2009, the DJIA was at 6,547. Currently, February 2016 we are at 16,431. If we had simply moved in a straight line, from the low until now, most of us would be quite comfortable. However, going to almost 18,000 first and then giving back some of those gains is not fun. In our last letter, we included a chart showing intra-year corrections and year-end values. The beginning of the year, or corrections during the year, is not necessarily a predictor of how the year will progress.

We are tracking our portfolios closely and diversification has been helpful. Generally, this year U.S. stocks and International stocks are down. Some bonds are up, as are a few nontraditional assets. Overall, performance is as expected in this environment. The exception is oil, which is significantly lower, where we have minimal exposure.

The Press

The news is fixating on creating anxiety and for some, it is working! Politicians capitalize on it as well. While we are not naïve about the challenges we face, and there will always be plenty to worry about, there are positives. Unemployment rates have fallen, housing is up, interest rates are low, petroleum and gas prices are low, and we are not as dependent on foreign oil. For example, General Motors had one of its best years ever in terms of sales and the stock pays a 5% dividend. Advances in technology are growing exponentially, which can affect every industry, and in many ways improve our lives.

We typically receive very few calls during market corrections. I believe it is because we have always built in good and bad markets into your financial planning and cash flow. We understand that short-term events do not change a well-thought-out strategy for how to weather them. You have seen it work firsthand and many of you have decades of experience. We cannot predict the market or what may happen next, but we can help you stay focused on whether anything has changed for you long-term.

Staying Grounded

I recently attended conferences where Alan Greenspan, the former Chairman of the Federal Reserve, Cokie Roberts, political commentator and Washington insider, and Jeremy Siegel, Wharton professor and author of “Stocks for the Long Run,” gave wonderful, historical perspective on the economy, markets and politics. I always find it beneficial to get different viewpoints from credible sources that have lived through many significant times in our country.

Sherri and Alan Greenspan

Sherri, Jeremy Siegel, Melissa Joy

Our Community

Many of you have shared concern about the Flint water situation. Our office is not on the Flint water system; however, we are very close to the homes and businesses in the area that are. We are deeply concerned about those who are most vulnerable and could be affected long-term, especially pregnant women, newborn babies, and young children. Studies have shown lead has a detrimental, long-term effect on those whose brains are still developing. Our donation to the Food Bank was one step in that direction. I am currently a trustee of The Community Foundation of Greater Flint, which will be very involved, with others, in providing for the long-term needs of these children. Our focus will be in the areas of health care, nutrition, education and social services, as well as the research that will be needed since there is much we do not know. We do not need more bottled water. We actually have structural challenges in the buildings that are housing the water and they can’t handle any more weight. If you want to learn more or wish to help, feel free to go to I can tell you firsthand, the outpouring of concern, donations and generosity from around the country has been just amazing!

Market Volatility


Raymond James makes a market in GM. Sherri Stephens, Raymond James Financial Services, Inc., its affiliates, officers, directors or branch offices may in the normal course of business have a position in any securities mentioned in this report. GM is not closely followed by Raymond James Research. Stock price quoted as of 2/29/16: GM: $29.44. Dividends are not guaranteed and must be authorized by the company’s board of directors. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Investments mentioned may not be suitable for all investors. The VIX (CBOE volatility index) is the ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market’s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Past performance may not be indicative of future results. Expressions of opinions are as of this date and are subject to change without notice. Any opinions are those of Sherri Stephens and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and investors may incur a profit or a loss regardless of strategy selected. Diversification does not ensure a profit or guarantee against a loss. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility.

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Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.