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20Aug
Yield Curve
Economy

Indeed, we seem to be living in interesting times!  I know I have spoken with many of you in the past regarding the yield curve and past lessons we have learned from it.  I found the attached article written by Sonal Desai, Ph.D., Chief Investment Officer of Franklin Templeton Fixed Income to be of particular interest.  I hope you find it to be both timely and the value as well.

Yield Curve Article

Barb Culver

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22Jul
Do You Remember 1987?
Economy

(I give credit to a Motley Fool article called “Party like It’s 1987” written May 12, 2019 for much of the information in the following article.  Also, I am not making any recommendations to buy, sell or hold any particular positions.)

Through April 30, the S&P 500 index had earned 18.3%.  This is the best stretch for the first four months of the year since 1987!  Interestingly, most of us will not remember 1987 for the impressive performance of the S&P 500 in January.  Rather, we tend to remember the 20.5% drop on October 19 – which remains the biggest one-day decline in the history of the S&P 500 index.  Even with the decline, the S&P 500 ended up 5% for the year in 1987.
(Source: https://seekingalpha.com/instablog/)

Looking back even further, Ryan Dietrich of LPL Financial told CNBC that, until now, there have been only four years since World War II when the market earned 15% or more in the first four months.  Specifically, those years were 1967, 1975, 1983 and 1987.  However, please note that the months between May and October have been really volatile in the same years.

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04Jun
An Update on the Latest Position on Tariffs
Economy

There has been a flurry of activity regarding our trade policy with China and China’s reaction to it.  Jeff Herzog, Ph.D. and Portfolio Manager at Lord Abbett, published this analysis on May 17, 2019.  I thought it was very insightful and hope you do as well!

The title of his article is “Tariffs, Tweets, Trade and Trump: An Update.”

The U.S. administration is clearly weighing market reaction to its current actions, but at the same time investors are trying to absorb how far the White House will press China. While the economic impact depends on the ebb and flow of negotiations, beyond the tweets that batter markets we think the main issues are as follows:

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21May
Looking for a New/Pre-owned Car/Truck/SUV in 2019?
Economy
Kiplinger predicts “there will be plenty of deals in 2019.”
(Source: The Kiplinger Letter April 12, 2019.)

While there may be fewer incentives than in 2018, here are some tips for 2019:

August and September are good months to shop as 2019 models are cleared from lots to make room for the 2020’s.  The same is true for year-end as auto dealers want to reduce taxable inventory. Specifically consider the day after Christmas and New Year’s Eve.
(Source: Yahoo Answers 5-5-2019)

While SUV’s and pickup trucks are in highest demand, they are also in high supply.

The average price of a new car in the U.S. has consistently climbed over the years, but look at what has happened to trucks: JD Power shows truck buyers pay 61% more for a new pickup compared to the cost 10 years ago. The average price of a new car rose 28% in the past decade to $32,500.  The average cost of a new truck is closer to $44,000!

(Source: “Capability Will Cost You: Trucks Cost 61% More Compared to a Decade Ago” Sean Szykowski, The Wall Street Journal; February 27, 2019.)
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15May
What Just Happened?
Economy
Here we were, coasting merrily along in the U.S. stock market.  Then, all of sudden, the last few days hit!

While I will be sending several opinions on consecutive days, I wanted to start with this one from Giolio Martini, Partner, Director of Strategic Asset Allocation at Lord Abbett.

Will Trade Trauma Trip Up U.S. Growth?

In our view, the effects of recently imposed tariffs likely will not have a significant impact on the current U.S. Gross Domestic Product (GDP) trajectory.

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01Nov
Is the Bull Market Over?
Economy

Here’s an ARTICLE you may find interesting.

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03Oct
5 Year Economic Prediction from Northern Trust
Economy

The information in this email is not to be taken as a recommendation to invest in any certain way.  Ginger Szala wrote “6 Economic Predictions for Next 5 Years: Northern Trust”, Sept. 10, 2018 as a result of interviewing Bob Browne the Chief Investment Officer of Northern Trust.)

Northern Trust has been shifting assets back in to the U.S. because “they have more confidence in the short-term U.S. story than in the international one.”  Browne thinks the U.S. equities will return about 6.5% total return in the short- term and expect equities to return closer to 6% over the next 5 years.  He predicts high-yield bonds at 6.3% total return in the short-term and 4.9% over the next five years.

In contrast, he projects 8.3% total return for emerging markets over the next 5 years.

He sees no risk of recession in the next 5 years and expects only one more interest rate increase from the Fed in 2018 and one in 2019.

While this obviously just represents the opinion of one institution, I thought you might be interested in seeing the total return predictions.

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

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14Sep
Boomers, Gen X-ers, Millennials, and Money
Economy

One of the special skills of the Resonate team is working intergenerationally.  We are grateful to be working with three generations of many of our clients and – in some cases – with the fourth generation as well.

Here are some of the insights we have learned from our client families:

  1. Baby Boomers are feeling more secure about retirement than that did in 2010.  In fact, 15% more Boomers feel ready for retirement today than in 2010.  Many continue to choose to live well below their means.  This is true, in part, because “leaving a legacy to family and making a difference” are key values of this generation.
  2. Conversely, many Gen Xers are feeling enormous financial pressure.  Non-mortgage debt has increased 15% since 2014, leading to credit card balances carrying over from month to month.  Add the burden of student loans and we understand the stress of debt.
  3. Many Millennials feel financially confident and have already adopted positive savings habits.  Due, in part, to the uncertainly of Social Security, they also see saving for retirement a necessity.  The access to social media often leads to feelings of inadequacy about their own lifestyle, which leads to impulse spending.
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06Apr
Income + Tariffs + Inflation = Underperformance
Economy

I found this blog to be extremely interesting – hope you do too!

Eaton Vance Advisory Blog

Feel free to contact me if you’d like to talk.

Barbara A. Culver
CFP®, ChFC®, CLU, AEP®
Resonate, Inc.
(513) 605-2500

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05Apr
Keeping Volatility in Perspective
Economy

Based on the continuing market volatility, I thought that you might find market perspectives from various economists and portfolio managers employed by the Capital Group to be encouraging. 

(Many of you will recognize the name of the Capital Group’s subsidiary –  The American Funds.)  Founded in Los Angeles, California in 1931, the Capital Group ranks among the world’s oldest and largest investment management organizations.  It has more than $1.7 trillion in assets under management and has offices around the globe in the Americas, Asia, Australia and Europe.  (Source: Wikipedia)  Robert Lind, the company’s European economist says, “There is mounting evidence that near-term momentum is building in the global economy and the cycle appears to be self-sustaining, particularly with respect to Europe.  The synchronization of global growth has raised the possibility that the cycle can be stronger for longer.”

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