June – 2016 Newsletter
This last week of June has given the New World Order the first real road block in decades. As the Brit’s took to the polling booth to vote for the ability to determine their own future, the markets became spooked and volatile. Many of the markets quickly recovered the early losses, but the British Sterling Pound has taken a 10% loss to rest at 1.33 per U.S. Dollar, which the Sterling hasn’t seen since 1985. This global volatility has been pushing investors into U.S. government and U.S. Corporate debt. The 10yr U.S. Treasury note has dropped in yield to 1.47%. While we don’t believe the Federal Reserve can increase short-term rates anytime in the near future, it does make it quite a burden to find bonds with a decent yield for investment purposes. We are pleased with the returns for the first half of 2016, but we are never satisfied and will continue searching for income opportunities. The main caveat for markets in the U.S. is that other European Union countries could follow the path of the British and potentially unravel the EU and their currency. Then we would see large amounts of investment capital fleeing into the U.S., forcing rates and yields even lower for U.S. investors.
