Market Minute on Finance Friday

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The tiny island nation of Cyprus was once again the center of attention this week after accepting terms for a controversial bailout package designed to prevent it from becoming the first country to exit the Euro currency bloc. Despite all of this noise across the pond, U.S. equity markets crawled higher, with the S&P 500 finally overtaking its long sought all-time-high early Thursday afternoon to join the Dow Jones Industrial Average in record territory.

Will the market continue to move higher? There are some indications that the answer is “yes,” as the U.S. economy is currently the best house in a bad global neighborhood. The job market is looking better than it has in years, as is housing, spending and a host of other indicators. On the other hand, for market strategists, record highs often signal a pullback.

For investors, reaching an all time high offers a great mile-marker for evaluating your personal asset allocation and strategy. If you have enough money to meet your needs, it might be time to make an adjustment. If you don’t, and your plan remains on track, you’ll get some peace of mind from stopping to check on the status of your nest egg.

Market Minute on Finance Friday

Video

The tiny island nation of Cyprus was once again the center of attention this week after accepting terms for a controversial bailout package designed to prevent it from becoming the first country to exit the Euro currency bloc. Despite all of this noise across the pond, U.S. equity markets crawled higher, with the S&P 500 finally overtaking its long sought all-time-high early Thursday afternoon to join the Dow Jones Industrial Average in record territory.

Will the market continue to move higher? There are some indications that the answer is “yes,” as the U.S. economy is currently the best house in a bad global neighborhood. The job market is looking better than it has in years, as is housing, spending and a host of other indicators. On the other hand, for market strategists, record highs often signal a pullback.

For investors, reaching an all time high offers a great mile-marker for evaluating your personal asset allocation and strategy. If you have enough money to meet your needs, it might be time to make an adjustment. If you don’t, and your plan remains on track, you’ll get some peace of mind from stopping to check on the status of your nest egg.

Market Minute on Finance Friday

Video

March madness is back. This week saw frayed nerves, fragile hopes, and high-stakes games coming right down to the wire. And that’s just in the tiny Mediterranean country of Cyprus. Of course, the NCAA men’s college basketball tournament also got underway this week, and there were plenty of heart-stopping moments on the basketball court too.

Off the court, the greatest excitement for investors came when finance ministers in the European Union proposed a tax on savers’ deposits to help finance the cost of a bank bailout in Cyrpus. The politics of a bank levy are a bit complicated, as Cyprus is an offshore haven for foreign depositors, including many well-heeled Russian citizens.

As in prior episodes of Greek tragedy, financial markets don’t quite know how to react. Europe could come to a workable agreement and keep its currency bloc intact, or they could lose the game as clock ticks down.

Whether Cyprus turns out to be a buzzer beater or a heartbreaker, investors who want to understand the situation a bit better should heed the old adage about following the money. If bank deposits shift away from Cyrpus and other periphery nations and more toward Germany and similar countries, the ripples will be felt across the financial markets.

Market Minute on Finance Friday

Video

After the surprise resignation of Pope Benedict—an event that last occurred 600 years ago—an enclave of high-ranking cardinals met at the Vatican to elect a new leader for the Catholic Church, and they surprised the world by choosing Cardinal Bergoglio of Argentina. Bergoglio will go by Pope Francis the First, and he represents a number of notable firsts in addition to his name. He is the first Jesuit pope, the first pope from outside Europe, and the first pope from the southern hemisphere. Pope Francis also seems to have a healthy sense of humor; according to news account, he responded by saying to his fellow cardinals, “May God forgive you for what you’ve done.”

Today, Pope Francis asked the Vatican’s College of Cardinals to “not give in to pessimism and discouragement.” The stock market, which has continued to chug higher in March, appears to be heeding his words. Yesterday, the Dow Jones Industrial Average closed higher for the tenth straight day, something that hasn’t happened in 17 years, and has only occurred 12 times since 1948. Clearly, the stock market is not willing to surrender to pessimism or discouragement at this point.

At this point in the market cycle, investors should be wary of jumping whole-hog on the stock-market bandwagon. For most people, a goals-based approach makes sense; the ultimate objective of investing should be to achieve personal financial goals rather than capitalizing on the hottest market trends. SEI’s approach to investing avoids flavor-of-the-month positioning and puts the focus where it should be—on achieving personal financial objectives.

Market Minute on Finance Friday

Video

The financial markets were more exciting than Dancing with Stars this week. The gyrations started with the initial results of the election in Italy, which stoked fears that the country would abandon its austerity plan. U.S. markets then shook off those fears and moved higher, with the Dow Jones Industrials Average setting a record. As the week came to a close, political dysfunction in Washington and concerns over budget cuts dampened enthusiasm.

Investors now find themselves in a state of confusion, wondering about what happens next. Are equity markets too high or are they poised for a fall? Are interest rates stuck at near-zero or are they set to rise? For many people, the situation is more unsettling than that video of people doing the Harlem Shake on an airplane.

If you find yourself unable to look away and relax, you can take a more proactive approach and educate yourself about the topics that capture your attention. Stop searching the internet for videos of kittens in boxes and spend a few minutes each day looking up and learning about the factors that move the financial markets.

If you put forth just a little bit of effort, perhaps starting by watching the Market Minute each week, in no time at all you will increase your knowledge and your comfort level.