Early 2019 Market Update

As a part of The Wealth Group’s systematic investing process we have developed and refined, we update and review your portfolio and the internal holdings on a regular basis. This is an update based on that process, and there is no action required on your end.  

We are sure to review the model portfolios we use on an ongoing, pre-planned basis, but we also pay close attention to each individual investment daily to ensure we don't see any major changes that require action. We make adjustments and allocation shifts as the economy and investment markets shift.

 The market is off to a great start in 2019, with a good portion of the pullback in December already being gained back. We pay close attention to important U.S. and international economic indicators, and are still seeing signs for a strong economy moving forward. Some of these indicators include (charts to support these facts the bottom of this post):  

  • Record-high corporate earnings that are still rising.

  • The strongest employment market we have experienced in almost 50 years. There are more job openings in the U.S. than there are persons actively looking for work.

  • Interest rates that are still low from a historical perspective.

  • Healthy credit markets (2-year swap spreads remain low).

  • Strong overall economic activity – industrial production, real incomes, and real retail sales all at all-time highs.

What does this mean for your portfolio? While the past few months have been a bumpy ride, we always focus on long-term returns and not the short-term. The year 2017 was an unusual market in that we saw steady increases each month in our models. Contrast that with 2018, where we witnessed more volatility (though still in line with historical norms for volatility). One thing we always say is to focus on the things that you can control, such as: 

  • How much you are contributing each month to long-term investing.

  • How you handle debt. Do you have a plan for aggressively paying off 100% of your debt?

  • How you manage your month-to-month expenses.

By focusing on the crucial variables you can control as outlined above, while remembering that long-term, patient investors have always been rewarded in this country, you have built a solid foundation for financial peace for many decades to come.

 As always, if you want additional details or information, please don't hesitate to reach out and let us know.

Supporting data via charts:

Green cells indicate growth/expansion; red cells indicate contraction. A lot of green on the board here.

Earnings yield on stocks is significantly higher than yield on 10-year Treasury bonds right now. This is good.

2-year Swap Spreads are low, which signals healthy credit markets (not distressed).

Because The Wealth Group, Austin B. Colby & Associates is independent of Raymond James, the expressed written opinions above are our own and not necessarily reflective of Raymond James’ opinions.