Camelot Portfolios Talking Points

3 Charts that Explain 2016

With only days remaining in this calendar year, 2016 ended up being quite historical in both domestic and international markets. There were corrections, contractions, reversals, expansions in what seemed to be an emotional roller coaster for many investors. This leads us to back to February of 2016. Just 10 months ago, oil was down to $27/barrel. The energy sector was still stalling as this sector continued its

Price of Crude Oil, January 21, 2016 through February 25, 2016.                                              Source: OFDP.org, continuous futures contract- Crude Oil

tailspin towards the ground. Since this inflection point, petro related companies have significantly shifted expenditures; even OPEC made cuts in November.

S&P500 (blue line) & VIX Volatility measure (green/red)                                                       Source: Yahoo Finance: S&P 500

Continuing our quest to tell of our journey of 2016, we turn to June 23, 2016. On this date, the citizens of the United Kingdom decided to leave the European Union. Markets in the United States, United Kingdom, and the rest of Europe reacted swiftly when the markets opened on June 24th. The uncertainty of the referendum spiked volatility to north of 20 on the S&P 500. This date marked the largest macro market movement for the year 2016.

S&P500 (blue line) & VIX Volatility measure (green/red)                                                     Source: Yahoo Finance: S&P 500

While Europe continues into the great unknown, the United States experienced a very different reaction in its markets since November 8th. In the past 50 days, US equity markets like the S&P 500 and Dow Jones Industrial have spiked 8-9 percent. To put this in perspective, leading up to November 8th, S&P 500 was only up 2 percent leading up to the primary election. Today, the S&P 500 is set to gain 10 percent by the end of the year baring any major catastrophe.     

The Times We Live In

How do you view the world? Is it one that is inherently broken and could never be fixed for the better? If you are that pessimistic, then you may need to change your thought process. A recent study by an economist who measures living conditions around the world considers the world to be much healthier, safer, and wealthier than you might believe (see chart below). Max Roser dives into some of the data that looks at the standard of living across the world (Roser). Other the past 100 years, people today live longer, are better educated, healthier, and are politically freer (Roser).

While there is considerable evidence in favor for higher standards of living, the human population, as a whole, is not replacing the population it supports. A hundred years ago, fertility rates were hovering around 5-6 children per woman (Roser). Today, it hovers around 2.5 children (Roser). It is true women may not have the need to have 5-6 children if you know all of your children are going to live past the age of 5, but it does play a major factor in the economic growth over the next 25-50 years (Roser). As a whole, the vast majority of humans are under better circumstances compared to their parents and or grandparents. Hopefully, we will continue to develop beyond even our current recognizable standard of living.

Source: Max Roser/A History Of Global Livin.

Compiled by the Camelot Portfolios Investment Committee

Darren Munn, CFA, Chief Investment Officer

Sarah Berndt, Portfolio Manager

Eric Kartman, Research

Matthew Moses, CAP ®, President

Drew Steinman, CPA, Trader/Research

Frank Echelmeyer, MBA, CKA®, Advisor Consultant

-for Broker/Dealer and RIA use only-

References

Roser, Max. A history of Global Living. December 2016. 2016.

 Disclosure

The materials presented is for use by professional advisors only.  It is not intended as informational and educational, and is not intended to be interpreted as investment advice.  The references to specific investment ideas, be they concepts, trends, sectors or even specific securities, are not recommendations for any advisor to adopt for any of their clients.  No investor or client reading these materials should view them as investment advice.  These materials are to be utilized as a catalyst for thought and discussion regarding the economy, investments, and responsible investing in general.  Past performance is not necessarily indicative of future returns, and there is no guarantee that any information presented herein will contribute to a profitable portfolio.  All facts referenced herein are derived from sources believed to be reliable. 

Any charts, graphs, or visual aids presented herein are intended to demonstrate concepts more fully discussed in the text of this brochure, and which cannot be fully explained without the assistance of a professional from Camelot Portfolios LLC.  Readers should not in any way interpret these visual aids as a device with which to ascertain investment decisions or an investment approach.  Only your professional adviser should interpret this information.

The S&P 500 is an unmanaged index used as a general measure of market performance.  You cannot invest directly in an index. Accordingly, performance results for investment indexes do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results.

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