May 2020 Monthly Outlook – So Far

I sure underestimated the size of the relief rally and my thesis has been wrong – so far.

The market has made a miraculous recovery.  Certainly better than I anticipated.  Yet perhaps a little ahead of itself.  Basically, stocks are only down approx. 15% from the all-time high in February 2020.  It seems to me that the US and world are more than 15% out-of-whack, so there is clearly a disconnect between the market and what’s happening around the globe.

A few data points to consider:

  • There are now over 30 million people unemployed in the US – that’s almost 20% of the workforce; that’s 8 million more jobs lost than all the jobs created from 2009 – 2019; and that’s 21 million more jobs lost than during the entire Great Financial Crash in 2008-2009.  Yes, many of these people will go back to work once the economy opens back up, but I think its clear many will not have a job to go back to.

5.1.2020_Monthly_outlook_1

  • Both Chase and Wells Fargo have stopped doing HELOCs and have tightened conditions in which it will make mortgages, requiring higher FICO scores and bigger down payments for new loans.  Why?  “Wells Fargo Home Lending will temporarily stop accepting applications for all new home equity lines of credit after April 30,” Goyda said in an emailed statement. The choice “reflects careful consideration of current market conditions and the uncertainty around the timing and scope of the anticipated economic recovery.”
  • As of April 29th, more than 3.8 million homeowners were in mortgage forbearance plans, under the governments CARES Act program.  This represents 7.3% of all active mortgages accounting for $841 billion in unpaid principal.  Applications to participate in the forbearance program have been swelling at a rate of approximately 500,000 per week.

The U.S. economy contracted -4.8% in the first quarter, according to the GDP release yesterday. It’s the largest contraction in GDP since 4th quarter of 2008.  This was worse than analysts were expecting and was the first contraction since the first quarter of 2014. 2Q is going to be worse as much of the economy has been closed for the first month of the quarter. Perhaps the more astonishing data point was the decline in personal consumption, which shrank -7.6%. This suggests consumers were cutting back even before the economy officially closed. Even with a re-opening, it is hard to envision a scenario where consumers run out to spend. An economy that is 70% consumption may take longer to recover than most initially thought.

5.1.2020_Monthly_outlook_2

source: Strategas

The key point is that the US economy is not Sleeping Beauty, ready to wake up at first kiss by the government.   It’s true that $2+ trillion in government bailout money, and trillions more from the Federal Reserve, will blunt the damage. But it won’t stop the atrophy. It just slows it down.  My outlook is for a slow, “swoosh” like recovery.  Basically a sharp contraction followed by a gradual recovery over the next 18 months.

On the investment front, there is a disconnect between rising stock prices and falling corporate earnings.  Based on my swoosh economic outlook, I estimate the fair value of the S&P 500 is around 2,600, compared to 2,912 where it ended April.  This implies a potential 11% pullback from current levels.  The big question is where are we in the process?  Are we in the true recovery phase (see right side below) or are we at the early stages before things get worse (see left side below).  The answer likely is based on the medical outcome.  With a proven treatment for Covid-19 or a vaccine we are probably on the right side – without either we are probably on the left side.

5.1.2020_Monthly_outlook_3

Quote of the Day
“KEEP IN MIND THAT progress is not always linear. It takes constant course correcting and often a lot of zigzagging. Unfortunate things happen, accidents occur, and setbacks are usually painful, but that does not mean we quit.”

– Buzz Aldrin (Astronaut)

I hope this report is helpful.  Please feel free to share with friends and family.

 

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

 

  • May is National Mental Health awareness month.  Nearly 44 million American adults, and millions of children, experience mental health conditions each year. Let’s all get educated on this issue and work towards acceptance and inclusion of people dealing with mental health issues.

              

May 5th                       Cinco De Mayo – stay thirsty my friends                 

May 10th                     Mother’s Day – wishing all mom’s, grandmothers, and great grandmothers a wonderful day. Hopefully soon we can get together to celebrate.

May 16th                      Armed Forces Day.  Dedicated to recognizing those presently serving in our armed forces

May 23rd                     My daughter Caryn’s birthday  

May 25th                     Memorial Day – let’s remember and give thanks to all who served our country

 

Sources:  Strategas, Fidelity, CNBC.com, Dwyer Strategy

 

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.

April 2020 Market Update – Trajectory

Following up on my 3/31/2020 note on the CARES Act here is a link to IRS information on how to receive your stimulus payment     https://www.irs.gov/coronavirus  NOTE:  The IRS will NOT call you about direct payments.  Any calls you receive are scams.

We are in a new world that has 3 inter-related parts –  Healthcare, Economic, and Financial.

On the healthcare front my biggest concern is the trajectory of the spread of Covid-19 here in the US.  “Current U.S. trends are concerning, suggesting a course potentially worse than Italy. “We highlight five dynamics to watch [which we] believe suggest the U.S. is facing a broad and accelerating outbreak.” (Morgan Stanley Biotechnology analyst)

  1. U.S. cases are growing the fastest globally
  2. U.S. mortality is not slowing despite social distancing
  3. New cases are growing faster than testing capacity
  4. New ‘hot spots’ are exhibiting growth above other regions
  5. U.S. social-distancing measures remain less strict than those of other countries

“We would highlight that the biggest risk to this forecast is that while we have reasonable confidence the East and West coasts will reach peak cases in the next 2-3 weeks, the interior of the country is now exhibiting signs of new outbreaks.” (Morgan Stanley)

This is a scary and sobering outlook.  While I pray the trajectory shifts from blue line in the chart on the left to the pink line, my outlook is based on the red line.

On the economic front, my biggest concern is the longer it takes to get the virus under control, so the economy can open back up, the greater the possibility of significant and potentially permanent damage to the economy, both here in the US and globally.  Here, I am praying for a path that follows the dark blue line, but my outlook is based on the light blue line. This would have us in a recession until the end of 2021.

4.1.2020_Monthly_outlook_3

Source Blackstone

On the financial front, the Federal Reserve and the US government are taking extraordinary steps to support the financial system.  Only time will tell to what extent these actions succeed in limiting the damage.  From an investment perspective , I believe we are in the eye of the storm.  We had the initial damage when the storm first hit in early March. We are now in a period of relative calm, but I expect the storm to swing back around and create more damage.

Using history as guide, I expect we will likely retest the lows in stocks from mid-March, which would be a 15% decline from where we ended March.   It is also conceivable we could go even lower if the virus drags on and the economy remains shutdown longer. “Waterfall declines – Stocks have broken the initials lows of a waterfall decline almost 70% of the time by an average of 7.2%”  (Ned Davis Research)

4.1.2020_Monthly_outlook_4

Right now I believe the market is somewhere between fear and panic (see chart below).  When it comes to your portfolio, I have to weigh the risk of going back into stocks too early, with potential for some additional downside, against the risk of going back in too late, with the potential to miss some of the recovery.  Catching it right at the point of maximum financial opportunity is virtually impossible, more so in these uncharted waters.  Please reply to this email (or give me a call) to let me know your thoughts on going too early or too late.

4.1.2020_Monthly_outlook_5

As always, we continue to monitor your portfolio and the market/economy continuously.

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

  • April  is National Autism Awareness month.  Let’s all get educated on this issue and works towards acceptance and inclusion of people dealing with autism.

April 9th                       Passover begins – Chag Pesach Sameach

April 10th                     Christian’s wife Maecy birthday

April 12th                      Easter Sunday – Have a blessed and Holy Easter

April 12 & 13th            We adopted our 4 legged children Coco (2010) and Buddy (2013)

April 15th                     Tax Day.  Remember to make those IRA or Roth contributions.  NOTE:  Tax day extended to July 15, 2020!

April 22nd                     Earth Day – let’s all recycle, turn out lights when we leave rooms, and do all we can for our environment

April 25th                     My daughter Satya’s birthday – wow she is turning 35!  I must be getting old 😊

Sources:  Ned Davis Research, Oppenheimer Investments, Blackstone, Morgan Stanley Research, Westcore Funds

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.

March 2020 Monthly Outlook – Virus Recession?

This coronavirus is a true wild card. It appears to be spreading globally. It is now on every continent except Antarctica and in over 60 countries. While individual risk is low, collectively the public health risk is significant.

“More cases are showing up in the U.S. and seem likely to be just the start. The scope, severity, and duration are uncertain. How much it changes behavior in the U.S. is uncertain.”  (Ed Hyman Evercore ISI)

People are starting to react out of an abundance of caution.  This is critical as the consumer has been the driving force in the US economy.

Certainly there is going to be slowing economic growth, both here and around the globe.  “The risks are clearly skewed to the downside until the outbreak is contained. An increasing amount of companies [are] suggesting potential production cuts should supply chain disruptions persist into Q2 or later.” (Jan Hatzius, Goldman’s chief U.S. economist).   If they get the virus contained and/or find a vaccine, the economic damage will be short term.  If the virus spreads and it takes longer to find a treatment, then we could be looking at a recession later this year or early 2021.

On the investment front, some of our indicators are flashing red.  Specifically, the S&P 500 broke below a 2-year trend line. As such, we are adjusting client portfolios to lower equity exposure.  We are suggesting client’s do the same in their 401Ks or other accounts that we don’t manage.  Always consider your investment objectives, time horizon, and risk tolerance before making any changes. Call us if you have questions.

3.2.2020_MONTHLY_OUTLOOK_CHART_1

This situation is quite uncertain, and we don’t want to overreact.  But we also don’t want to underreact.

At the moment, we feel a moderate adjustment is sufficient.  The market could spring back as fast as it declined, so we don’t want to overshoot with our adjustments. In fact, I fully expect a bounce back rally in stocks in the near-term.  However, I am not confident that rally will hold and stocks likely drop back to their recent lows from last week.

I also expect central banks and fiscal authorities to take action to try to offset the economic and financial impact of the virus situation.  This should provide a short-term boost to the financial markets. Here again, the scope of these actions is limited and whether something like an interest rate cut changes consumer behavior in the face of the virus is suspect.

The next several weeks will be telling.  If the spread of the virus starts to slow, that will indicate that actions being taken (quarantines, travel restrictions, etc.) are working.  We are monitoring this using

https://www.worldometers.info/, which provides real-time data on population, governments and economics. It is managed by an international team of developers, researchers and volunteers.

I hope this report proves helpful. Please call with any questions or concerns.

 

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

March is Women’s History Month.  Please says thanks to all the important women in your life.

March 8th                   International Women’s Day

March 8th                   Daylight Savings begins – Spring forward

March 9th                   Purim – Chag Purim Sameach to all of the Jewish faith

March 17th                 St Patrick’s Day

March 19th                 Spring begins in US

 

Sources: CNBC.com, FactSet

 

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.

 

 

February Monthly Outlook – Catalyst for Correction

The stock markets started 2020 right were they left off in 2019 – a steady climb to new all-time highs.  What was driving the market higher?

I would call it “peak happiness” – a wonderful mix of a high level of valuation, investor confidence, financial liquidity and risk appetites.    In fact, stocks were almost back to where they were in 2017 when they hit “peak happiness,” marking the highest level achieved during this decade-long bull market.

2.4.2020_MONTHLY_OUTLOOK_CHART_1

Similarly, trader sentiment and hedge-fund positioning were almost — but not quite — as unreservedly aggressive as they were then, as investor surveys and the patterns in options-trading volume confirm. Bespoke Investment Group calculates the market has been statistically “overbought” 98% of all days since October, the longest such stretch since late-2017-early 2018.

While stock gains and all-time highs are great, the underlying fundamentals leave the market vulnerable to a sudden correction when any of these “happiness” factors reverses or an unexpected catalyst appears.  And many times, the more extended the stock market is, the farther it falls when the happiness ends. The catalyst for the correction back in late 2017 was rising interest rates, tightening liquidity and recession fears.  This time the catalyst is the coronavirus.

Financial markets hate uncertainty and widespread medical emergencies fit in that category.  Historically, there is a negative short-term reaction to these types of catalysts, but long-term results have generally been positive.

Economists currently estimate the outbreak could lower China GDP (gross domestic product) by 1%.  The impact on the US economy will be less as our GDP is more dependent on domestic demands.  The world economy, however, may slow back towards stall speed (less than 1% growth) as China has been a major driver of global growth.

What does it all mean to you?

In the short-term, stocks will certainly be more volatile and likely to continue to fall. Longer term, the US economy looks stable and capable of managing through.  However, much depends on how widespread the coronavirus spreads and how long it takes authorities to get it under control.

While my cautious approach in the late fall of 2019 looked wrong-footed given the equity market gains at the end of last year, I am glad we remained neutrally positioned as that bodes well for this period of uncertainty and volatility.

Please call me if you have any questions or concerns about the markets, economy or your portfolio.

We have added a new tool to help those nearing or just beginning retirement to explore their readiness for retirement.  It’s an easy interactive tool.  Please share it with family, friends and colleagues.

https://www.ready-2-retire.me/JimMcCarthy

 

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

  • February is Black History Month.  Let’s all strive for understanding and acceptance for people of all colors, nationality, and religions.

February  2nd                   Groundhog Day – yay he didn’t see his shadow. No let’s hope he’s reliable!

February 14th                  Valentine’s Day

February 17th                  Presidents Day

 

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:  Julex Capital, FactSet, CNBC, Bespoke 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.

January 2020 Market Outlook- What May Tip The Scale?

2019 proved to be a year full of surprises. Trade wars and a global manufacturing decline weighed on the global economies in 2019, although interest rate cuts and resilient consumers provided a positive stock market outcome.

The question heading into 2020 is: What may tip the scale?

Will ongoing trade uncertainty and weakened manufacturing hurt job growth, finally dragging down the services and consumer side of the economy? Or will interest rate cuts and a resolution of the trade war spark a fresh round of global economic growth?

Key takeaways:

  • The U.S. economy will likely remain split in early 2020, with manufacturing and business investment still struggling amid trade uncertainty but services activity and consumer spending healthy.
  • A preliminary U.S.-China trade deal might stabilize corporate confidence, but a strong business investment environment likely requires a comprehensive trade deal.
  • A global recession could occur if the manufacturing slowdown spreads to jobs and consumers.
  • The Fed’s 2019 rate cuts should support the economy and stocks, although the cuts are only a partial cure for what ails manufacturing and corporate profits.

1.7.2020_MONTHLY_OUTLOOK_CHART_1

Investing in 2020:

I have an increasing concern that equity prices may be out of line with corporate fundamentals (profits).

Although the stock market continues reaching record highs, companies are making less than they did five years ago, so this performance is largely driven by Price/Earnings (P/E) expansion. The gap between the S&P 500 and corporate profits hasn’t been this wide since the Tech Bubble in the late 1990s, another period when the S&P 500 had strong gains despite stagnant earnings.

1.7.2020_MONTHLY_OUTLOOK_CHART_2

Source: St. Louis Fed, Yahoo Finance

 

Risks I am watching:

  • Geopolitical risks – recently heightened by the US action in Iran
  • Election year – always creates uncertainty and therefore volatility
  • Global Trade relations – do the US & China strike a deal, do the US & Europe have a trade dispute, does the UK leaving the EU create problems in Europe.

Stay tuned!

I hope this note provides useful information.  Please feel free to share it with family and friends.

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

  • January is National Blood Donation Month.  Let’s all give a pint to help another.

 

January   5th                    My granddaughter Isys turns 14.  I must be getting old.

January 10th                    My better half, Eloise’s birthday.

January 15th                    10th anniversary of my independent practice – thank you to all my loyal clients.

January 20th                    Martin Luther King Day.  Let’s pray for more racial tolerance and understanding.

 

Sources: Schwab Investment Management, CNBC, Yahoo Finance

 

 

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.

 

December 2019 – Monthly Outlook – Can it Continue?

U.S. Equities closed the month of November near record highs.  The gains have been fueled by optimism that U.S.-China trade issues will be resolved amicably.  I remain skeptical of this. This can clearly be seen in the divergence of consumer confidence and CEO confidence.  Consumers tend to be more near-term focused, while CEOs have to make plans for staffing, capital expenditures and investments going out a year or two. Clearly CEOs are concerned.

12.4.2019_MONTHLY_OUTLOOK_CHART_1

Also, while consumer confidence remains significantly higher than CEOs, “Consumer confidence declined for a fourth consecutive month, driven by a softening in consumers’ assessment of current business and employment conditions,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

One key economic indicators I follow is the Leading Economic Indicators (LEI).  While month-to-month changes can be caused by “noise”, I watch the longer term trends.  Here are notes on the most recent report for October 2019:

  • “The US LEI declined for a third consecutive month, and its six-month growth rate turned negative for the first time since May 2016. The decline was driven by weaknesses in new orders for manufacturing, average weekly hours, and unemployment insurance claims,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “The major difference this month is the softening in the labor market, whereas conditions in manufacturing remain weak and show no signs of improvement yet. Taken together, the LEI suggests that the economy will end the year on a weak note, at just below 2 percent growth.”

 

The fact that the 6-month growth rate has turned negative is concerning to me.

All told, I feel the US economy is slowing but will likely plod along at about 2% annual growth.  This is not the problem.

The problem is the financial markets, specifically US stocks, are reflecting a much better situation.  The term you might here is “stocks are priced for perfection”,  or “it’s a goldilocks market” meaning stock prices are reflecting positive outcomes to trade disputes, economic growth, monetary stimulus and consumer spending. How will the market react if any, or some, of these outcomes are not as positive?

For the last few months, I have been cautious and in a neutral position in portfolios.  Through the end of November, that posture proved too conservative.  However, stocks have declined by 2% over just the last three trading days, mostly because of new uncertainty around the trade situation. Just today, December 3rd, President Trump indicated he may wait until after the 2020 elections to push for a trade deal with China.  December 15th is a key date.  The US is set to impose new tariffs on China.  Will that happen? The market has been betting it will not. I’m not so sure.

I continue to believe the upside potential is less than the downside risk, at the moment. As such, we will remain neutrally positioned with a cautious bias. I would rather miss out on a small upside move to avoid getting caught in a swift downside adjustment.

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.

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

  • December is Universal Human Rights Day.  Let’s pray that all people, regardless of race, religion, gender, or nationality  can learn to treat others as we all wish to be treated.

 

December 10th            Human Rights Day   –  I have cherished the ideal  of a democratic and free society… it is an ideal for which I am prepared to die. – Nelson Mandela

December 15th            Healthcare open enrollment – for coverage starting Jan 1, 2020 – ENDS!   

December 19th            Christian’s birthday

December 21st                  Winter Solstice    –       The shortest day of the year and the start of winter

December 22nd           Happy Hanukkah  –    May it also be a festival of love, happiness, success, and health in your world now and always.

December 25th            Merry Christmas – have a wonderful holiday.  Let’s all remember the true significance of this day – the birth of Christ. 

 

Sources: The Conference Board, CNBC

 

 

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.

November 2019 Monthly Outlook – Fool Me Once ….. Won’t Get Fooled Again!

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 3rd 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.

11.5.2019_MONTHLY_OUTLOOK_CHART_1

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.

11.5.2019_MONTHLY_OUTLOOK_CHART_2

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 1st.

 

November 1st           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 3rd           Set those clocks back

November 5th           Election Day  – be sure to vote

November 11th         Veterans Day – says thanks a Vet

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

November 28th        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.