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Investment Commentary: Focus on fundamentals

Jul 05, 2017 08:30AM ● By Ben Scott

by Angelo R. Imbrogno

With the volatility of the stock market at hand investors become increasingly worried about the potential of significant market losses. One simple advice is to always maintain focus on fundamentals to help with the investment decisions and to filter out the noise.

Job gains have been steady, and therefore continue to support wage increases and consumer spending. The LPL Financial research team sees GDP growth to be above the 2%* mark that it has averaged over the past decade and U.S. exports have received a boost from the falling U.S. dollar and directly benefiting multinational corporations. Confidence among businesses and consumer remains high and that signals for faster growth. All these portray a good macro picture of the economy.

Overall financial conditions have eased based on positive outlook from the Federal Reserve Bank of Chicago’s National Financial Conditions Index, as corporate credit spreads on high-yield and investment-grade credit remain narrow. These levels do not indicate any stress in the fixed income markets.

We are unsure at this time if any changes to the fiscal policy and if any possible tax-reforms will be implemented in 2017, but we do believe these are important factors and we will continue to monitor as the market will have a direct reaction. 

Angelo Imbrogno is the president of Blue Diamond Wealth Management