n light of the recent market volatility, we thought we would share some thoughts on the causes.

  • Global stock markets fell as the European debt crisis worsened with Spanish bond yields reaching Euro-era record highs.  In addition, investors continue to be concerned with the slowdown in China.
  • U.S. stocks are currently suffering smaller declines of 1.5% – 2.0%.  The S&P 500 had rallied 4% from its intraday low on July 12th. The decline over the last two days is correcting that fast advance.
  • U.S. stocks remain on an uptrend since reaching the 2012 low on June 1st.  We are watching the 200-day moving average on the S&P 500 (currently at 1314).  A significant breakdown from that level would increase the chance of a deeper correction.
  • As discussed in detail in last week’s conference call, the portfolio is positioned defensively with high quality, dividend-paying equities; little international exposure; and significant weighting towards alternative investments that offer some downside protection.


This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the Funds or any stock in particular, nor should it be construed as a recommendation to purchase or sell a security, including futures contracts.

There are risks involved with investing, including loss of principal. Current and future portfolio holdings are subject to risks as well. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Narrowly focused investments and smaller companies typically exhibit higher volatility. Bonds and bond funds will decrease in value as interest rates rise. High-yield bonds involve greater risks of default or downgrade and are more volatile than investment-grade securities, due to the speculative nature of their investments. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume.

Diversification may not protect against market risk. There is no assurance the objectives discussed will be met. Past performance does not guarantee future results Index returns are for illustrative purposes only and do not represent actual portfolio performance. Index returns do not reflect any management fees, transaction costs or expenses. One cannot invest directly in an index.