Recently we had a hesitant client tell us about all the reasons she was nervous about investing in the markets:
What if interest rates increase? What if they don’t?
What happens if we elect a Republican president? How about a Democrat?
What effect does global warming have on the markets?
What if we break out into cyber war?
During the summer months some of us like to cook outside – and slow cookers seem to be all the rage this year! The food may seem to take forever to cook, and we often can become impatient waiting for signs of progress.
We may have the same feeling when contemplating most of the world investment markets. Investors have finally decided that a diet of foreign bonds paying negative interest is unhealthy. While in the U.S. we are still w-a-i-t-i-n-g for the Federal Reserve to raise interest rates. The latest forecast is for a September rate increase. We can only hope! In the meantime the bond markets are suffering and definitely cooling. We saw big declines in bond values and returns for the second quarter, as hope for an interest rate increase in June evaporated.
Consumers in the U.S. enjoyed a little relief as energy costs declined – a useful prelude to the summer driving season instead of the usual increases in gas prices. Housing is recovering, employment is stabilizing and, although excruciatingly slow – we are indeed cooking here!