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After a Difficult Start to the Year, Many Investments are in the Black

After a difficult start of the year for most investments, many categories of assets – including U.S., international and emerging market stocks, as well as investment grade and high yield bonds, are solidly in the black.

4.25.16What changed?

During January and February, investors were very concerned about possible downturns in China and the U.S. economy, with particular concerns about bank losses tied to energy loans.

Oil prices rose steadily in February, from the mid $20s to above $40 today. While few energy companies are highly profitable at $40 oil, many more would be pressed to pay back loans at $20 oil. In February, investors worried that U.S. and European banks would suffer significant losses on their loans to energy companies. This fear abated as oil steadily rose in price.

The Chinese stock market, which fell by more than 5% on three of the first eleven days of January, stabilized in February as the Chinese economy showed signs of new growth. Indeed, the latest polls of manufacturers in China show expansion after a year of contraction. The fear that the government could no longer effectively stimulate the Chinese economy diminished, as recent government measures appeared to be working.

All told, while worldwide economic growth is still modest, investors viewed the stabilization of oil and China as reasons to be optimistic.

DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.
Investment Advisory Team

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Hefren-Tillotson Inc. is a leading diversified financial services firm providing investment and retirement plan management and comprehensive, financial planning through MASTERPLAN® for individuals and businesses. The firm’s wealth management services are administered by Certified Financial Planner (CFP) professionals, Chartered Financial Analyst (CFA) Charter holders, attorneys, Chartered Life Underwriters, and CPA/PFS’s. Hefren-Tillotson offers corporate services including 401(k) retirement planning, executive financial counseling, fiduciary reviews and workplace financial planning seminars. Founded in 1948, the firm is headquartered in Pittsburgh and has offices located in Pittsburgh, Butler, Greensburg, North Hills, and South Hills.