The equity markets ended October and have begun November on a high note.  This is mostly due to positive comments about a  US/China trade deal.  While I am hopeful that a deal can be struck, I will reserve judgement until ink is on paper.  Recall there was talk of a trade deal back in March 2019.  The equity markets rallied to a new all-time high in April, only to fall almost 7% in May after the trade talks broke down and both US and China imposed additional tariffs.   There was more “happy” talk about a deal in July, leading the stock market to rally to a new, even higher all-time high only to – you guessed it- have the talks break down and the market fall roughly 6.2% into August.  The recent talk of a “phase-one” deal has fueled the market to again climb to new all-time highs.  Perhaps the 3^rd time is a charm, but I remain leery that we have a repeat of the two earlier setbacks in the talks.  Our administration is extremely unpredictable and China has also shown to be playing games.

In other news, the US economy continues to be resilient.  Growth has slowed somewhat but remains in the 2% annual GDP growth range, which is reasonable given all the variables.  The consumer continues to spend, supported by a solid job market.  This is offsetting manufacturing, which continues to decline, mostly impacted by trade.  The chart below shows that several recession indicators are flashing red but several others remain positive. The US economy will definitely fall back into a recession – the question is when, not if, and how severe will it be. If US / China trade tensions ease or at least remain at a truce, then I expect the US economy to avoid a recession until late 2020 or early 2021.  If trade tensions escalate then the likelihood of recession moves closer in time.

Our approach has always been to stay diversified and adjust as economic and market conditions dictate.  In years like 2019, diversification can feel disappointing but investing isn’t a 1 year game, it’s a long-term process and diversification generally wins in the long run. The results highlighted below are for a typical 60% equity 40% fixed income and cash portfolio,  and reasonably reflect how our investment philosophy has performed.

We will continue to follow our philosophy, while monitoring markets for opportunities and threats.

We hope you find this information helpful.  Please feel free to share it with family, friends and colleagues.

 

November Calendar of Events   (comments and additions for future months are always welcome)

• November is National Family Caregivers Month.   Please consider reaching out to a family member or friend who is caring for a loved one. Why not offer to give them a day off.  This hits home for Eloise and I this year as we have been caring for my mom since August 2019 and her Uncle since May 2018.  Sadly Uncle CS passed away on November 1^st.

 

November 1^st           Healthcare open enrollment – runs through 12/15/18  – for coverage starting Jan 1, 2018  

                                    Note: Medicare open enrollment started 10/15/18 and end 12/7/18

November 3^rd           Set those clocks back

November 5^th           Election Day  – be sure to vote

November 11^th         Veterans Day – says thanks a Vet

November 21^st         Great American Smokeout – encourage a smoker to quit

November 28^th        Thanksgiving – have a wonderful holiday 

 

 

P.S. Thank you for your referrals. They are making a big difference in my practice. Feel free to share my name with your friends on Facebook or LinkedIn

 

Sources:  BlackRock, Blackstone Investment Group

 

 

Although information herein has been obtained from sources deemed reliable, its accuracy and completeness are not asserted. All opinions and estimates included in this report constitute the judgment of the financial advisor as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.

Investing involves risk and you may incur a profit or a loss. Diversification does not ensure a profit or ensure against a loss. There is no assurance that any investment strategy will be successful.  Past performance is no assurance of future results.

Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus containing this and other information. Read it carefully before you invest or send money.

Information provided should not be construed as legal or tax advice.  You should discuss any tax or legal matter with the appropriate professional.