The ACM Journal 2012 Q2

The second quarter of 2012 began on a sour note for stock investors. April was a month of ups and downs, but mostly downs. May was truly awful. June was still erratic, but it did provide some relief as global stock markets rallied into the close of the quarter. The S&P 500 fell as much as 10.0% during the quarter, but finished with a loss of 2.8%. As you can see on the nearby chart, all stock markets around the globe shared in the lousy performance. Real estate was the one bright spot for growth investors.

The culprits for the declines were the usual suspects: weak economic growth at home, uncertainty in the policy arena, and turmoil overseas. Reports of economic growth (whether GDP or Industrial Production) have been tepid lately. While still positive, government data shows a declining rate of growth, and previously-released numbers are being restated lower with some frequency. Employment reports have seen similar trends. The debates over the “fiscal cliff” and “Obamacare” were also making headlines (and waves) during the second quarter. There is no way to accurately forecast the outcome of legislation, elections, or policy debates, but suffice it to say business confidence has not been high with all the uncertainty. Given that the election season is just heating up, I don’t expect any relief on this front for a while. The impact on the capital markets will likely result in greater volatility at least through November. However, my favorite approach for weathering all the political advertising is to curl up in the fetal position, close my eyes, and put my hands over my ears. I strongly recommend it.

To Download the rest of the article and the complete 2012 Q2 Newsletter please click below.