NEW YORK, April 11, 2013 /PRNewswire/ — Zaim Hajdari, a New York City-based wealth manager, has taken a look back at first-quarter market results and is announcing a reason to celebrate while sounding a note of caution.
"Performance like this is good for an entire year, let alone a quarter," said Hajdari. The Dow Jones Industrial Average rose more than 11%, to close out March at 14,578.54. "And the good news is that even after this big run-up, I think equities are fairly valued—they're not overpriced." That being said, he warned against thinking this would continue, noting such a pace was not sustainable. In fact, he said there might very well be a selloff, as investors who did well decide to take some chips off the table. But that doesn't mean everyone should.
Even though the second quarter may not be as good, Hajdari is telling his clients who aren't planning to use their invested money for at least five years to stay in equities. "I'm still overweight equities," he said, advising against an over-caution that might lead investors to putting too much into fixed income. Not only would they miss out on potential future equity gains, they'd be especially vulnerable to a rise in interest rates, he said.
The Dow wasn't the only index rising. The S&P 500 did almost as well, rising more than 10% in the same quarter. Indeed, all 10 S&P sectors were up this quarter, which seems to prove the adage that a rising tide lifts all boats. Particularly strong were health care, up about 15%, and consumer staples, up about 13%. Small cap stocks overall also did well, with the NASDAQ, generally comprising smaller companies, rising 8.21%, and the Russell 2000 index of small cap companies up 12.03%.
The main index that's down is the CBOE Volatility Index, which is often used as a proxy for market fear. It plunged about 30%, in a sign of investor optimism, that is, a belief that there will be no huge movements in either direction.
Equities are not the only sign of a robust economy: Housing may be turning a corner. Fannie Mae posted a record $7.6 billion in quarterly earnings. Nevertheless, employment remains stubborn: In March, the economy added only 88,000 jobs, the lowest monthly gain since last June. Although that's not enough to put a damper on what was overall a very good start to the year, it does show there is room for improvement on the economy.
Overall, however, Hajdari says he's cautiously optimistic.
About The Hajdari Group
The Hajdari Group (www.thehajdarigroup.com) is an independent firm in New York City. President and founder Zaim Hajdari is a Chartered Retirement Planning Counselor with 18 years experience. Our advisors provide financial planning and investment management services to high-net-worth individuals and families. Other services include 401(k) rollover advice, retirement planning, college planning and estate planning.
Hajdari is also the Branch Manager, RJFS "Securities offered through Raymond James Financial Services, Inc., member FINRA/ SIPC" and was formerly an investment manager with JPMorgan Chase where he oversaw over $3 billion in client assets.
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