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Markets In a Trading Range

What may be an overlooked aspect of the recent market environment are the trading ranges prevalent over the past two years in key market indices. As the bottom left chart illustrates, U.S. stocks have been range-bound for much of the time since mid-2014.

Similar trading ranges can be found with 10 year Treasury yields and the U.S. Dollar Index (bottom right). While trading ranges ultimately prove temporary as market and economic conditions progress through cycles, returns are obviously suppressed while they are intact. It can be important during range-bound periods, to recognize beginning and ending points of investment evaluations since short-to-intermediate term returns can deviate meaningfully depending upon where an index is in the trading range.

With capital appreciation often limited in range-bound markets, we believe one of the best means to navigate them is to utilize dividend-oriented strategies, which place a greater emphasis on current income and dividend growth.


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.