July 6 Lowe Wealth Advisors conference call with Morris Segall

If you missed the conference call with Morris Segall and Lowe Wealth Advisors July 6th click here to listen. The call is about 35 minutes in length and discusses the economic conditions, capital markets and Lowe Wealth Advisors strategies. Note: The call is intended to be informational in nature and should not be considered advice or a recommendation for any particular strategy. Past performance is no guarantee of future results.

Today, we are seeing economic weakness which we did not expect to see until Labor Day. Readers may recall that we believed favorable corporate earnings could spark a near term stock market rally. While the earnings rally did begin, the negative economic news is trumping the earnings essentially neutralizing positive earnings. This news drove the stock market indexes down between 2.5% and 3.1% (Source WSJ online)(see index disclaimer).

The weak manufacturing data and poor consumer sentiment reports lead us to conclude that our strategy of increasing potential defensive positions such as cash remains prudent. We are content to be underweight in stocks with exposure to cash, bonds, and alternative asset classes in our actively managed discretionary accounts. While cash is hardly a flashy investment it is an important tactical tool and allocation.

We are not saying that a near term earnings rally is not possible. There remain a significant number of companies who will report earnings in the coming weeks, which if favorable could lead to potential market rallies. For this reason, we recognize that a diversified posture remains appropriate and being completely out to the stock market is not an appropriate strategy for most investors.

Lowe Wealth Advisors  continues to study and research alternative asset classes which might have the potential to achieve a target rate of return regardless of the broad market outcomes. However, any such strategies must be considered with the highest degree of caution and we are not going to jump out of one rowboat into another one too quickly. At this time, elevated cash equals strategic protection.

Another aspect we are monitoring closely is the prior administration tax cuts which expire on December 31. Lowe Wealth Advisors will consider the impact of the expiration of the tax cuts and will communicate with you from a portfolio and estate planning standpoint.

Finally, if you have not read the Quarterly Newsletter from economist Anirban Basu which was included in your quarterly report package, you can read it by clicking here.

Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice. Not all portfolios are actively managed. If you have a question about how your account is being managed please contact us. Generally accounts less than $150,000 are not actively managed. An Index is a portfolio of specific securities (common examples are S&P, DJIA, NASDAQ), the performance of which is often used as a benchmark in judging the relative performance of certain asset classes. Indexes are unmanaged portfolios and investors cannot invest directly in an index. Past performance is not indicative of future results.

Important Disclosures

• Not all portfolios are actively managed. If you have a question about how your account is being managed please contact us.
• No diversification can completely protect against market risk or other risk factors with investing. A diversified portfolio could still lose money.
• An Index is a portfolio of specific securities (common examples are S&P, DJIA, NASDAQ), the performance of which is often used as a benchmark in judging the relative performance of certain asset classes. Indexes are unmanaged portfolios and investors cannot invest directly in an index. Past performance is not indicative of future results.

Foreign investing carries additional risk such as currency risk, political risk and different accounting standards.

*Lowe Wealth Advisors is a registered investment advisor.