Granite Group Advisors

Valuation, valuation, valuation.  Granite Group has consistently talked about valuation.  We don’t want to repeat ourselves, but…the market is trading at over 16 times next year’s earnings. With the promise of a slightly higher 10 year, moderate growth, we question the current premium valuation being assigned to the market in the short term.  We would exercise caution on new equity allocations and wait for a better valuation to enter the markets in the short term. Granite Group believes the markets can go higher next year, but not at the same rate experienced in the last two years.

You can follow Granite Group Advisors on LinkedIn and learn more about our Corporate Retirement Services and Wealth Management on our  Website.

Our message is simple: Thank you to all those Veterans whom have served and have given the ultimate sacrifice to protect our liberties and freedoms .

As for the markets: Granite Group believes, that in the short term the S&P 500 is fairly valued. We would be very selective when adding to new equity allocations.

October has lived up to its namesake. There was a trick two weeks ago and today there is a treat. Japan treated world markets with unexpected easing. The US markets will hit new highs today. The International and Emerging Markets are rallying. We feel that in the short term US markets will be fairly valued after today’s action.   Emerging Markets are much less expensive, and to a lesser degree, International markets. The old adage of “Don’t fight the Fed” still works today.

You can follow Granite Group Advisors on LinkedIn and learn more about our Corporate Retirement Services and Wealth Management on our  Website.

In previous blogs, we commented on the overvaluation of the markets prior to September, and that the  downturn would end in October.  As all of this has come to fruition and we have retraced almost all that was lost prior to the downturn, the question that arises is:  Where do we go from here?

As far as stocks go, we had indicated that the market would go higher in the short term, and most likely put in a positive return for the quarter.  Today we should discuss the expected rise in interest rates from the Federal Reserve.  While we expect the Fed to finally end bond buying in today’s announcement, the raising of short term rates is now on the table for the near future.  Some on Wall Street expect the raising of short term interest rates in the end of the second quarter, and some don’t expect that rate to change until later in the year.  Our expectation of interest rates is that they will go up next year.  However, we do not see the longer end of the yield curve moving up in any dramatic fashion.  The table is set to move short term interest rates higher.  We anticipate this process to be slower than expected  and longer dated bonds to move even more slowly.

You can follow Granite Group Advisors on LinkedIn and learn more about our Corporate Retirement Services and Wealth Management on our  Website.

The last time I have been on ride like this was at Cedar Point in Ohio. It was called the Gemini. The first slope was straight down , then several twists, eventually coming back to where we started. We believe the market will do the same. We are in the twist portion of the ride and expect some consolidation. After a breather, we expect the market to be just a little higher by year end.

You can follow Granite Group Advisors on LinkedIn and learn more about our Corporate Retirement Services and Wealth Management on our  Website.

As we stated the other day, a close below 1900 would be problematic from a technical basis. With the markets down over 400 points today, Granite Group thought it would be prudent to impart a few facts:

1) Economic numbers in general are good, but not over the top great
2) The markets are trading at a little more than 14 times next year’s earnings ( 14.1 is the 10 year average)
3) The world is not coming to an end

For patient investors, this market presents opportunities. This is not personal advice, just our opinion. For our private or retirement clients, please feel free to call us for any clarification.

The S&P closed at 1906, right at a major technical point. The market is now trading at 15 times 2015 earnings. Granite Group believes this level would be a good entry point for long term investors. If the S&P were to close below 1900 that would spark concern from a technical perspective only. We want to be clear that we are not calling a bottom, but we believe that valuations are now more favorable. Earning season has begun, and with decent earning reports coming in, this could be the catalyst to move markets away from headlines and start moving higher into the year end.

You can follow Granite Group Advisors on LinkedIn and learn more about our Corporate Retirement Services and Wealth Management on our  Website.

Granite Group is happy that our blog has created so much interaction with our clients. We are “old school” in our approach with no fancy algorithms. As of this writing the S&P is at 1935. A technical breach of 1925 on the S&P, would take us to the next resistance level of around 1900. We do not believe that we will breach the 1900 point because on a fundamental level, the S&P would be trading at 15 times 2015 first call estimates. While we are NOT traders, and it is hard “to catch a falling knife”, anything lower would present a reasonable fundamental entry point for longer term investors.

If you are not a private client or a retirement plan client, please call your advisor before investing or call us for any clarification.

You can also follow Granite Group Advisors on LinkedIn and learn more about our Corporate Retirement Services and Wealth Management on our  Website.

Granite Group Advisors has written on Edison’s excessive 401k fee case back in March of this year. The Supreme Court is going to hear if employees should be able to sue plans for retaining imprudent investments. (please see article below). If you would like to find out if you have the same excessive fee problem as Edison does, please contact Lyle Himebaugh at 203-210-7814 or lhimebaugh@granitegroupadvisors.com

Supreme Court to hear Edison International excessive fee case