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Market Views - Economic Outlook 2016

Outlook 2015

Stocks

After six years of generally rising prices, the rally in the S&P 500 slowed in 2015. The stock market is likely to begin a correction in 2016 as lame duck years tend to produce the “Gift” of falling stock prices for the next President.

One of the most reliable long term valuation measures, market value of U.S. Equities/U.S. GDP, is close to all-time highs. Margin debt, a gage of the leverage investors are using to buy stocks, had reached an all-time high but has started to decline, historically an early warning.

The market is likely to undergo style rotation. We believe value stocks will outperform growth stocks as profit margins fall. The types of stocks we favor in this environment should benefit from a stronger U.S. Dollar and lower U.S. energy costs. Active management will be important to take advantage of market volatility and lower prices would offer excellent buying opportunities.
Positives Negatives
Positive Share buybacks strong Negative Election year volatility
Positive Cheaper energy costs aid producers and transporters Negative Equity valuations high
Negative Margin debt peaked, now falling
Negative Global debt overhang
Negative Declining corporate profits
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The views and opinions expressed are those of James Investment Research, Inc.

This information is of a general nature and does not constitute financial advice. It does not take into account your individual financial situation, objectives or needs, and should not be relied upon as a substitute for financial or other professional advice to assess, among other things, whether any such information is appropriate for you and/or applicable to your particular circumstances. In addition, this does not constitute an offer to sell, or the solicitation of an offer to buy, any financial product, service or program. The information contained herein is based on public information we believe to be reliable, but its accuracy is not guaranteed.

Investing involves risks, including loss of principal.

Past performance is no guarantee of future results.

The James Advantage Funds are distributed by ALPS Distributors, Inc. 1290 Broadway, Ste. 1100, Denver, CO 80203 (Member FINRA). ALPS is not affiliated with James Investment Research, Inc.

S&P 500 refers to the Standard and Poor’s 500® Index with dividends reinvested. It generally represents the aggregate price changes in the largest 500 publicly traded companies. One cannot invest directly in an index.


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You should carefully consider the investment objectives, potential risks, management fees, and charges and expenses of the Fund before investing. The Fund's prospectus contains this and other information about the Fund, and should be read carefully before investing. You may obtain a current copy of the Fund's prospectus by calling 1-800-995-2637 or click here to view or download a prospectus online.

Mid, Small and Micro Cap investing involve greater risk not associated with investing in more established companies, such as greater price volatility, business risk, less liquidity and increased competitive threat. Fund holdings and sector weightings are subject to change without notice. Past performance is no guarantee of future results.
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Distributed by ALPS Distributors, Inc. 1290 Broadway, Ste 1100, Denver, CO 80203 (Member FINRA)