We hope you are having a great summer! As we start the second half of 2018, lets take a quick look at what we’ve seen so far this year, what could change in the next 6 months and where we might end up.
A Lot of Back & Forth
A theme that started to develop in the first quarter continued through the last 3 months too - a very choppy stock market. Domestically, most stocks are slightly negative so far this year, while international stocks are down a little bit more - and even bonds are down about -1.5%.1 While the market tends to take a breather after a strongly positive year like we had in 2017, there’s also a great deal of concern surrounding the implications of tariffs going forward. Whether those concerns are justified or not, we’ll have to wait & see. However right now the global market seems to have some trouble finding its footing.
But Fundamentally - Still Pretty, Pretty Good.
Looking deeper into the economy though, it’s actually a pretty good picture. Unemployment is as low as its been since 1969, and in fact if everyone in the Midwest that was unemployed, got a job - there would still be 180,000 job openings leftover! 2 Pretty amazing statistic, right? Our growth right now is almost 3% year over year, which is a higher than the 2% its been on average over the last several years.1 As a matter of fact, the one thing that could slow our economy down at this point is a lack of qualified workers. If you own a business or manage staff, this is likely your biggest concern and/or headache.
However, outside of that - we probably won’t see a dramatic change coming this year or even into 2019. Housing has been exceptionally strong as of late, as have auto sales. Globally the economies in Europe, Japan and China have all done relatively well. Keep in mind that most other countries took a while longer to recover from 2008 than the US did; as such they could have more room to grow as they are at a different point in their economic cycles.1
What Comes Next?
As we look to the rest of the year, we don’t necessarily this volatility going away; in fact it will probably be here to stay. What we do think is useful in an environment such as this is 1) diversification and 2) dividends.
As you likely know, diversification can help limit the impact of an adverse event in the broad stock or bond market.3 The more your money is spread across a variety of investments, the less likely any one thing can really ‘hurt’ your portfolio. Furthermore, if you have dividend-paying stocks as part of your strategy, those stocks are typically less volatile and can provide a further buffer if we continue to see swings in the market.3 Most likely you have dividend-paying stocks in your portfolio; however if you’re not sure, please feel free to call us at 859-341-8184 for a quick discussion about your allocation!
Looking for Us on Social Media?
Lastly - we have been working on our social media presence & refreshing our website. Twitter, Facebook, Linked In - we’re on it - and we will have links to them all on our emails so you may follow us easily. I will be posting stuff related to financial planning - but perhaps more importantly for some of you I will also be getting some help from our family’s new Golden Doodle (half golden retriever/half poodle) “Poppins”. Poppins is currently in training - he hopes to become a therapy dog in local schools someday – and looks forward to running through Smale Park with Dallas.
As always, thank you for your business, and if you happen to have a friend or neighbor that could use some help with their investments or financial planning, feel free to give them our info!
- Wall Street Journal, wsj.com
- Bureau of Labor Statistics, bls.gov
- Morningstar, morningstar.com
The views are those of Dallas N. Horn and Steve Horn and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. All economic and performance information is historical and not indicative of future results. Investments in securities do not offer a fix rate of return. Principal, yield and/or share price will fluctuate with changes in market conditions and, when sold or redeemed, you may receive more or less than originally invested. No system or financial planning strategy can guarantee future results.