Happy New Year!

Maybe one of our New Year’s resolutions should be to turn off the TV and put down the newspapers.  Did you know there is a direct correlation between higher News/Financial TV programs ratings and down markets?  They don’t only prey on investor fear but fuel it in an attempt to keep you tuned into their program.

The New Year has brought unrest to the markets not only Stateside but just about all over the globe.  Pick up any newspaper or turn on any news program and all the financial headlines are either about oil’s crash or about China and their slowing economic growth, lagging manufacturing numbers, and the fear that China’s pain will creep into other economies.  The reality is that China has projected this slow down for some time.  China is in the process of shifting from a manufacturing economy to one more dependent on services.  For the first time in 2015 services accounted for more than half of their economy.  This shift is a process that will not occur overnight and could be painful at times, but recent data suggests their economy is stabilizing.  Last year China’s growth fell to 6.9% and while this is the lowest growth China has had in 25 years, this puts them nowhere close to recession territory.  In comparison, our economic growth has been between 2-3 percent for the last few years.  It’s not a question of if China will become the world’s largest economy, it’s when.  China has certainly had missteps (circuit breaker, trade limits, lack of transparency, etc.), but at the moment I believe we are seeing an overreaction to headlines, much like we saw with the Greece crisis.

Be clever with your benjamins!

Written by:  Brad Kaplan

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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.