March 2016 Market Commentary

The first quarter of 2016 began with worrisome declines. January and February racked up major market losses for most of the major indices. At one point, the S&P 500 was down over 9%, oil was falling more precipitously than anyone imagined and the credit markets were flashing red alert in the junk bond area. The institutions were beginning to worry as the spreads in the junk bond markets began to widen and the next step would be illiquidity. The woes of China’s slow down were also weighing heavy on the market indices.

Then, it happened: the magic moment. Federal Reserve Chair Janet Yellen said, “Financial conditions have recently become less supportive of growth.” She further indicated that her much feared interest rate increases were foreseeably not happening in March. Of course, almost on cue, the stock market loved it, and why not? After all, now, it’s the only chance of anyone getting much of a return!! CEO’s across America are cheering because now their anemic earnings that will be announced at the end of the first quarter will be balanced by a month of upward movement in the market! As Kevin Bacon said in Animal House, “remain calm, all is well.”

The single best way to talk about the stock market, stocks, race horses, or the Super Bowl is in the rear view mirror. In fact, we are going to rename our quarterly and monthly commentaries and maybe our future blog as “The Rear View Mirror.” Only the truly sagacious people like Janet Yellen, Barney Frank, and Donald Trump have what it takes to interrupt the natural cycles of economics to bring you a better, yet somewhat artificially manufactured version of their economy. Man, it must be great to be King! Nevertheless, the dice have been cast, and we are now safely in April! Whew! How do you think Chairwoman Yellen will deal with the upcoming earnings misses? Hmmm. Well, these concerns aren’t for the likes of mere mortals like me to postulate. We will continue to have our clients’ assets “in the market,” and still focused on great quality. Furthermore, we will continue to pay homage to market volatility by maintaining an appropriate balance in bonds, cash, and other asset classes. Finally, we will joyfully prune some gains from portfolios prior to the people who, “sell in May and go away.” This adherence to process and discipline has always held our clients in good stead in the past, and we feel confident of that in the future.

Last thing, I wouldn’t be a good Kentuckian if I didn’t tell you who I liked in the Kentucky Derby. I would bet Brody’s Cause on the nose. Good Luck!

Warmest Regards,

Zandy Campbell

Mark Scott

A.G. Campbell Advisory, LLC, 1340 Smith Avenue, Suite 200, Baltimore, MD 21209