This June marked the 10^th anniversary of the Financial Crisis. To refresh your memory, June 2007 saw the collapse of 2 funds managed by Bear Stearns that speculated in credit derivatives backed by subprime mortgages. This was the start of a large chain reaction; with among other events Morgan Stanley and AIG almost collapsing. As I have mentioned before, it is always safer to hold assets at independent banks or custodians, than investment houses.

A few weeks ago Janet Yellen, head of the Federal Reserve, was asked about the chances of another Financial Crisis. She suggested, with the new stress test regulations, that another crisis is highly unlikely.

This quarter the stock market continued its gradual upward movement with surprisingly low volatility. When a negative political announcement came out the market fell, but quickly recovered within a few days. The good news is that despite the ups and downs of healthcare/tax reform in the political arena; the corporate earnings in most sectors from banks to technology remain quite good. This earnings backdrop is very important, because honestly, no one really knows what is going to happen in our nation’s capital.

Many are calling for a summer correction, which ironically means we may never get one, and just coast into the fall. With solid corporate earnings and a slow interest rate rising environment the stock market seems to be in a sweet spot. However, should one of the aforementioned factors drastically change in actual numbers or forecast, the direction of the market will then also alter.

Stay cool and enjoy your summer.