With the first two months of the year behind us I think it is a good time to pause and take a quick look back and a long look forward.
Since January most indexes have managed to erase all losses experienced in the fourth quarter of last year. Extreme pessimism felt at the end of last year has quickly turned into cautious optimism for the 2019. So what happened?
I believe three influencers moved the market in a positive direction: continued positive earnings, lowering of trade tensions with China and a relaxing of the Federal Reserve with respect to interest rate hikes and quantitative tightening. The challenge is as quickly as these influencers can turn positive they can turn negative.
Recently, I attended a conference where I spoke with many economists, money managers and other economic experts. Each looked at what could happen in the markets and the economy from a different perspective and used different measures to determine what might happen in the coming year. Interestingly enough, they all ended up in the same place. Economic slow down but no recession in sight.
Last week marked the tenth anniversary of the current bull market. While the first two months of the year saw markets surged, last week was one of the worst weeks in 2019. Is the great bull market over, consensus of opinion is not just yet. But definitely the economy is slowing and investors need to adjust to the new reality of slower markets and slower growth. There are many types of investing styles. Passive and active, strategic and tactical, and using Funds versus individual positions. Different styles work better during different periods of the economic cycle.
There is no question we are moving into a different part of a market cycle which means changing some of our approach to investing. In the next few blogs I will discuss these changes in greater detail.
With April 15th just a few weeks away many of us are focusing on our tax return. Don’t forget, the government gives you until April 15 to top off your prior-year contributions to individual retirement accounts (IRAs), simplified employee pensions (SEPs) and other retirement accounts like health savings accounts (HSAs).
TFG Events…. Please keep an eye out for information on our annual Trenton Thunder outing and for those of you going on the May cruise with us, Lisa will be sending out information in the coming weeks.
Until next time. My best, Mark