Monday 2/9/15 is a huge day for ATX Portfolio Advisors as we officially open our doors! Accountability is a core value of ATX and this weekly update will attempt to provide a quick snapshot of how we're doing. If you have input about the blog, please shoot me an email.
I frequently remind anyone that will listen that disciplined diversification is key to long term success as an investor. It's not a good idea to ever draw conclusions from short term trends, but recent performance does support our perspective that a globally diversified portfolio can insulate you from domestic volatility.
January was a tough month for the US markets, with the S&P 500® falling -3.00% after dividends. On the global level, the picture was somewhat brighter with the MSCI All Country World Index® dropping only -1.56%. Our ATX "All Stock" Accountable Portfolio(sm) fell -1.58% before fees, which of course were waived since it was a losing month.
Germany and Japan were highlights, showing positive growth of +1.77% and +2.34% respectively in dollar terms. In Europe, additional monetary stimulus by the European Central Bank gave a shot in the arm to markets. In emerging markets, India grew +7.94% for the month after interest rates were cut to help spur economic growth.
US REITs (Real Estate Investment Trusts) grew between +5.7% and +6.8% depending on the index, well ahead of the broader US market.
Of course, it's fixed income investments that provide flotation in stormy seas. Here's a quick snapshot of where interest rates on different fixed income alternatives were as of 2/7/15. Given our approach to constructing portfolios using individual fixed income ladders, these are estimates of the predictable returns you could expect if assembling a ladder or replacing a rung as of 2/7/15.
| Bond | 1-Year | 2-Year | 3-Year | 5-Year | 10-Year | 20-Year |
|---|---|---|---|---|---|---|
| CDs | 1.20% | 1.35% | 1.50% | 1.90% | 2.25% | 2.75% |
| US Treasuries | 0.47% | 0.82% | 1.17% | 1.53% | 1.95% | NA |
| US Agency/GSE | 0.71% | 1.15% | 1.58% | 2.06% | 3.03% | 3.20% |
| Munis(AAA) | 0.75% | 1.22% | 1.30% | 1.68% | 2.75% | 4.10% |
| SPDAs(A) | NA | NA | 1.60% | 2.75% | 3.25% | NA |
Disclaimer:
The views expressed herein are not intended to serve as a forecast, a guarantee of future results, investment recommendations or an offer to buy or sell securities by ATX Portfolio Advisors, LLC. Differences in account size, timing of transactions and market conditions prevailing at the time of investment may lead to different results, and clients may lose money. Past performance is not indicative of future results.
The yield table categorize bonds by Standard & Poor's (S&P) rating. Bonds which are not rated by S&P were excluded. Single Premium Deferred Annuities are categorized by AM Best ratings.
For purposes of determining a municipal bond’s rating, the yield table uses the greater of the third party guarantor's or insurer's financial strength rating and underlying rating, where applicable. Consider the financial strength ratings of the third party guarantor or insurer as well as any published underlying rating of the issuer for a more complete assessment of the bond's credit risk profile.
Ratings are opinions and not recommendations to purchase, hold or sell securities, and they do not address the market value of securities or their suitability for investment purposes. Ratings should not be relied on as investment advice. Please read important disclaimer information.
The bond yields displayed represent Yield to Worst and are subject to change and availability.
Ratings are opinions and not recommendations to purchase, hold or sell securities, and they do not address the market value of securities or their suitability for investment purposes. Ratings should not be relied on as investment advice.
In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.
Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.
Fixed annuities available at ATX Portfolio Advisors, LLC are issued by third-party insurance companies which pay ATX a commission. A contract’s financial guarantees are solely the responsibility of and are subject to the claims-paying ability of the issuing insurance company.
Guarantees are subject to the claims-paying ability of the issuing insurance company. Principal and interest are guaranteed if held for the length of the guarantee period.
Before exchanging, check with your current provider to see if it will assess a surrender charge, and also consider the existing benefits and features you may lose in an exchange, which may be of particular importance if poor market conditions.
Withdrawals of taxable amounts from an annuity are subject to ordinary income tax, and, if taken before age 59½, may be subject to a 10% IRS penalty.
Before investing, consider the investment objectives, risks, charges, and expenses of the annuity and its investment options. Call or write to ATX Portfolio Advisors, LLC for a free prospectus and, if available, summary prospectus containing this information. Read it carefully.