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Lauren’s blog covers topics that impact your finances, your family, and your future. Is there a topic you’d like Lauren to tackle? We’d love your suggestions and feedback.

In Your Best Interest: Our Spring 2018 Newsletter

Click here to view the full newsletter, including recent news, important dates, financial tips & tools, and more.


MARKET HIGHLIGHTS: Q1 2018

2018 hasn’t been an easy ride so far. Market volatility began to rear its ugly head almostfrom the start, and then stocks went on sale again when the S&P 500 dropped 5.9% over five days—its worst week since January 2016. On the heels of a particularly celebratory 2017 (at least from an investment perspective), the stock market proved it is anything but predictable. For the quarter, the S&P index was down -1.22% and the Dow Jones was down -2.49%. And though the techheavy NASDAQ was up slightly at +2.32%, it was down for the month by -2.88% after gaining an impressive +7.4% in January. Market volatility is back, and it’s likely to be with us for a while. 

Why the change in sentiment? Investors seem to be falling into a familiar pattern: the Trump Administration announces tariffs—this time on Chinese imports— but is not specific on the details. Wary of retaliation against American products sold abroad, traders put a lower value on the large, multinational companies that make up most of the major indexes. 

The last time this happened, the tariffs involved steel and aluminum. This time, the U.S. announced plans to impose tariffs on about $50 Billion worth of Chinese goods, which prompted China to retaliate, slapping its own tariffs on $3 Billion worth of US exports, including fruit, pork, and steel pipes. The threats from both countries have fueled fears of a global trade war.

Meanwhile, in the wake of the Cambridge Analytica scandal, Facebook shares fell almost 10%, from 176.83 down to 159.39. This took the social media giant down from the 5th largestcapitalization company in the S&P 500 index to the 6th (behind Berkshire Hathaway) and dragged the index down even further. And yet there is some good news. What’s remarkable about the selloff over things that may or may not happen is that it came amid some very good news about the U.S. economy. Durable-goods orders jumped 3.1% in February, sales of newly-constructed homes were solid, and Atlanta Fed president Raphael Bostic announced that there were “upside risks” in GDP and employment. Translated, that means that the economy is looking too good to keep interest rates as low as they have been—which means this is a curious time to be selling out and heading for the investment sidelines.

If none of that helps you feel less rattled, I recommend re-reading my blog Wall Street has gone wild! for some additional perspective. And if you’re still not at peace with the market and your place in it, give us a call. As always, we’re here to help. 

 

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In Your Best Interest: Our Fall 2017 Newsletter

Click here to view the full newsletter, including recent news, important dates, financial tips & tools, and more.


MARKET HIGHLIGHTS: Q3 2017

Thinking back over the quarter— and the entire year to date—I feel… breathless. Amid the whirlwind of global events, at least the economic and market news remains a bright spot, so let’s start the quarter review with some good news: 

In Q3, equity markets experienced gains, fueled by a late-August rally that pushed security prices upward. As the quarter came to an end, the benchmark indexes continued to rise. The Nasdaq and the Russell 2000 posted gains of more than 5.0%, followed closely by the Global Dow and the Dow. The S&P 500 trailed the other indexes listed here, yet still managed to increase by almost 4.0% since the end of Q2.

In September, the Federal Open Market Committee (FOMC) decided to hold the benchmark interest rate between 1 and 1.25% while setting expectations for an increase next quarter. The Fed noted that the labor market is continuing to strengthen, economic activity has been rising, job gains have remained solid, and unemployment rates are low. At the same time, household spending has expanded moderately, growth in business fixed investment has picked up, and inflation is running below 2%. 

In the rest of the news, the world is a mess. Donald Trump remains in the White House amid an accelerating Russia investigation, a frightening standoff with North Korea, and another failed attempt by Republicans to repeal the ACA. The Equifax data breach and the company’s inadequate response had everyone scrambling to secure their personal information. Protesters clashed in Charlottesville, Colin Kaepernick triggered a national debate, terrorist attacks escalated across Europe, and the US witnessed another mass shooting. Nature, too, was ill-tempered, with hurricanes devastating the Southern US, Cuba, Puerto Rico, and other regions; earthquakes in Mexico killing hundreds, and flooding causing record deaths around the globe. It’s been a year for the record books, and not in a good way. 

As we enter the final three months of 2017, it’s important to stay focused on what truly matters: love, health, and happiness. Know that our team will be doing our part by continuing to monitor your plan and your portfolio closely. For your part, do what you can to focus on what you can control… and to finally, hopefully, catch your breath.

 
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Disclosure

All written content on this site is for information purposes only. Opinions expressed herein are solely those of Lauren S. Klein, President, Klein Financial Advisors, Inc. Material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. Read More >