Covington Investment Advisors, Inc. Blog
News, Tips, Commentary, etc.
Covington Investment Advisors is continuing to expand in order to best serve the needs of our clients. Our office expansion efforts are underway and are nearing completion in the next few months. The expansion will provide us with more office space upstairs. You can see some pictures of the progress below. With our expanding space and client base, you may see some new faces at Covington soon. We would like to now introduce our newest hire, Nick Allen, an upcoming graduate of Indiana University of Pennsylvania. Nick will be joining us as a Research Analyst and has been interning at Covington since May.
There is a lot of noise in the markets in recent days. It is important to understand and stick to sound investment fundamentals under such circumstances. The market is currently adjusting to slowing earnings going into 2019, slowing global GDP growth, higher inflation and higher interest rates. You have probably heard me say: “What earnings do, the market does”. Moving from an earnings growth rate of 26.32% in 2018 to what is expected to be a 7% earnings growth rate in 2019 is a big change. We still have positive economic growth but we also have new policies that need to be absorbed into the economy. Additionally, all bull market cycles are killed by the Fed raising rates. The longest economic expansion in US history is coming to an end thanks to the Fed. When the Fed stops talking about raising rates the market will settle down. Today’s activities in...
Covington recently presented their observations on the market and economy at our annual shooting event held at Pike Run Country Club. Please find our presentation commentary below. Economic Update Looking at the business cycle framework, global expansion remains solid but many major economies have progressed toward more advanced stages of the business cycle where growth is moderating, credit tightens, and earnings start to come under pressure. Emerging markets face headwinds from China's industrial slowdown, looming trade uncertainties, and global monetary tightening. Europe has experienced the most significant slowdown among developed regions. 2017 was the first year since 2007 in which all major economies have growing/expansionary economies as measured by GDP growth. The trend is expected to be the same for 2018 with the exception of Argentina which is on pace to decline -2.83%. Note that Argentina has 40% interest rates, is highly dependent on commodities, plagued with corruption, and in...
I am pleased to announce that we have hired Mr. Nick Allen to work as an intern this summer. He will be assigned a number of projects for the company including various analyses, research projects and technology studies. Nick is a finance major at Indiana University of Pennsylvania (IUP) and is on track to graduate in December of this year. His courses of study include finance, investment, economics and management. Nick also serves as the Sector Leader of the Consumer Staples Section of the Student Managed Investment Portfolio organization at the college. This student organization is quite successful as it currently has $1.7 million in assets under management and has outperformed the S&P 500 over the last five quarters. In addition to his financial studies and experiences, Nick has worked in the computer labs for the IUP Libraries. In this capacity he assists library employees and patrons with computer hardware...
Fifteen years ago today Covington Investment Advisors was incorporated. The success we have had with and for our clients has allowed us to grow, hire more talent, continually enhance our technology, purchase our building, contribute to our communities’ societal needs, and expand our overall processes to customize your financial plans providing best in class investment management services and results. I do not hesitate to say we have formulated the best in class advisory firm as we are not a broker-dealer, nor are we affiliated with one. As an independent advisor, we have an open architectural structure to find the best financial solutions for you. We cut out all the unnecessary middlemen and their fees and we refuse any form of commissions. We are an advisory fee-based only firm. We do not sell products; we provide customized financial plans structured and managed on a separate account basis driven to address your...
On April 28, 2018, Covington Investment Advisors sponsored the Westmoreland Symphony Orchestra (WSO) Concert titled “Fauré Requiem”. At Covington, not only do we strive to meet our clients’ financial goals, we also focus on making a difference in our community. Fostering creativity in our schools is the key to continued growth and success for children and Covington is passionate about helping our children. Recognizing the diminishing arts programs in our schools and the many societal challenges that we face, we have felt compelled to do something about that. And so, we have been underwriting music and art programs in our community through our business and family foundations, some of which are facilitated through the Westmoreland Symphony Orchestra. This year Covington Investment Advisors, Inc., through the WSO, has established an award to recognize the private music teachers in our community to give long overlooked recognition for their impact on our children...
Volatility is Back The past couple days have tested investors’ appetite for risk with a spike in market volatility which we haven’t seen since June 2016. The Chicago Board Options Exchange Volatility Index (VIX), a measure of market downside volatility, has spiked gaining 28.51% on Friday, February 2nd and 115.60% on Monday February 5th. Making the headlines are what’s on the other side of volatility; VelocityShares Daily Inverse VIX ETN (XIV) and the ProShares Short VIX ETF (SVXY), trading strategies that bet on rising but calm markets. Both trading strategies lost more than 80% of their value as volatility surged. These headlines create an opportunity for us to once again highlight the differences between these shorter-term trading products versus what Covington does, which is to invest long-term in proven enterprises. Our strategy has created attractive returns for our clients by owning good companies over long periods of time. A...
Covington Investment Advisors, Inc. is pleased to announce that Sarah E. Rovedatti has joined our firm as Chief Compliance Officer. Sarah has over nine years’ experience working in the financial services industry holding various positions in client service and compliance. She is a graduate of Lycoming College with a B.A. in Business Administration and earned her MBA at Villanova University. Sarah will be responsible for maintaining, developing and monitoring the firm’s compliance program, ensuring that all activities of the firm meet regulatory requirements. She will also be acting as a liaison with legal and regulatory bodies on compliance-related issues.
Covington recently presented their observations on the market and economy at our annual shooting event held at Pike Run Country Club. Please find our presentation commentary below. The economy’s recent performance is real and is supported by sound economic fundamentals. GDP growth is shifting from Obama’s anemic growth rate of 1.8% to 3+% in the last two quarters. This growth rate of 3+% back to back quarters has not happened for over ten years. While GDP for 2016 will come in around 2.2% this year, 2018 is looking good as well with a projected growth rate of 2.6%. Global GDP is at 3.6%. The economy is continuing to expand and by definition a recession is declared when we experience three negative quarters of GDP so this bull market cycle continues. The roll back of regulations by President Trump has business confidence soaring. Companies are spending again on capital...
High Intensity Drug Trafficking Area (HIDTA) designation is key to providing a Multi-Jurisdictional Task Force in Western Pennsylvania to curb the source of drugs supplying the Opioid Epidemic. As an ongoing effort to have our congressional representative apply for a Federal High Intensity Drug Trafficking Area (HIDTA) designation for Westmoreland County, I recently met with the Acting United States Attorney for the Western District of Pennsylvania, Soo. C. Song, Retired Chancellor of the University of Pittsburgh and Chair of the Institute of Politics, Mark A. Nordenberg, and Director of the University of Pittsburgh School of Pharmacy, Janice L. Pringle. If we are to have any impact on the overdose death rate in our area we must stop the supply of illicit drugs. Attorney Song assured me that the application for a multi county “HIDTA” designation for our area is clearly justified and continues to be developed. I told her there is...