Markets Turmoil   What It Means To Investors & Our Portfolios 052010
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Markets Turmoil What It Means To Investors & Our Portfolios 052010

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Markets have not seen such volatility as occurred on May 6th since 1987. While the "handwriting has been on the wall" for some time, it\'s high time to take a call to caution seriously.

Markets have not seen such volatility as occurred on May 6th since 1987. While the "handwriting has been on the wall" for some time, it\'s high time to take a call to caution seriously.

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  • 1.           Markets Turmoil:    What it Means to Investors & Our Portfolios  To Our Friends of Silver Oak,   Yesterday, the stock market experienced the most extreme one day volatility since 1987. A number of reasons have been suggested to explain the gyrations. A simple typographical mistake was most likely the primary cause of the tumble – a trader allegedly entered a trade that was intended to be in the millions of dollars but an extra zero was added   Joel Framson & Eric Bruck,                   Principals    causing the trade in Procter and Gamble shares to    be in the billions. Immediately thereafter,   automatic computerized program trading kicked in   to exacerbate the trading volume. Mastering   the complexity  of wealth… Congress has recently been deliberating some elements of financial reform. Never has that goal to create and been more appropriate. The public should not be sustain  subjected to, and possibly penalized by, the a better life        extreme price movements and inefficiencies caused     by these professional stock market traders. Each of Silver Oak Wealth Advisors, us should contact our representatives to express our LLC    concerns and press for financial reforms that will   effectively address these trading practices.   Of course, the apparent trading error does not Click here to learn explain yesterday’s volatility fully. The economic   more... crisis in Greece and weakness in Spain and Portugal is causing stress throughout the Eurozone. It may take some time for Europe to stabilize. Until that happens, it is more likely that we will see more strength in the U.S. dollar, even more volatility in the domestic and European stock markets, and greater uncertainty over the structure and overall
  • 2. health of our capital markets. While economic data and corporate earnings have been improving, there remains considerable weakness in many parts of our economy. The deficit remains high, the banking system is not back to operating normally, and the housing industry has certainly not recovered. While employment numbers coming out today were encouraging, The rate of unemployment is still holding at an unacceptably high level. These are all continuing challenges which can be expected to cause disruptions and volatility in our capital markets. As you know from our prior updates, we at Silver Oak have been cautious and deliberate in our investment approach since the third quarter of 2008, when the capital markets and investment world experienced serious structural fissures. We have been conservative in designing our portfolios and extremely focused on a realistic analysis of risk inside of each investment opportunity. This path has paid off nicely for our clients in reducing portfolio volatility and enhancing growth of capital as the markets recovered. We continue to closely monitor our economy, global developments, and their implications for portfolio returns, While we do not think it is prudent to eliminate risk entirely, we believe that we have designed risk controlled portfolios that have continued to offer returns to meet our client needs. Please do not hesitate to call us if you should have any questions or comments. Sincerely, Joel H. Framson, President Eric D. Bruck, Principal