February Monthly News Letter

February Monthly News Letter

by Zach Marsh on Mar 2, 2018

Today’s note will serve as a February month-end review.  The asset class returns for the month were as follows:

Broad Sector Assets

S&P 500                                -3.63%                      TLT Long Term US Treasury                -3.2%

Russell 2000 Small Cap     -3.97%                          IEF Mid-Term US Treasury                  -1.1%

EFA Developed Int’l            -4.8%                          LQD Investment Grade Corp. Bonds         -2.5%

EEM Emerging Markets     -5.9%                          TIP Inflation-linked US Treasury Bonds    -1.05%

Gold                                      -2.07%                                 

Other Assets

Oil           -5.3%                     Silver -5.3%                         Copper -2.75%                 

Volatility Index VIX:  +46.6%       


Well after nearly 15 months of uninterrupted gains in the stock market, nearly every asset class struggled last month.  Traditional diversification benefits between stocks and bonds provided no relief as the pressure of higher, longer-term interest rates began to weigh on equities.  Volatility spiked in February.  The Cboe VIX index closed on January 31st at 13.54 and by February 6th it reached a high of 50.30 as the S&P temporarily slumped into correction territory, trading down nearly 12% from its highs to the lows on February 9th

The market found its footing from there and preceded to recover a good chunk of its losses.  But as of this writing, the S&P 500 is almost exactly flat on the year and the Dow is down over 1% for the year.  What a difference a few weeks makes.  Only time will tell if this turns out to be a temporary correction like Jan-Feb 2016 or will we see a more challenging year ahead.  I suspect that markets may retest the lows set on February 9th and from there we will see what transpires. 

Protecting your portfolios comes from diversification and alternative hedging strategies that protect when all assets begin to correlate, typically observed during periods of stress in the markets.  The growth and protection of your money is our number one priority and we continue to do everything in our power to guard it.  Thank you for your continued support.


Zach and David