I hope that the year 2018 is going well for all of you.
As measured by the major indexes, 2018 has seen volatility return to the markets. This is something which we haven’t seen in a while.
The first source of volatility are trade wars and tariffs. President Trump continues to negotiate with our major trade partners, but has now succeeded in completing deals with Mexico, Canada and The European Union. China continues to match Trump’s actions in defying our President, but most informed people hope that this too will soon be resolved.
Lately the volatility is not due to the tariffs and trade wars but rising interest rates. The two largest sell-offs for 2018, February and October, occurred at times when the 10-year treasury reached near 3.25% (both times I was on vacation so we’re re-thinking future travel plans ) . High interest rates cause the markets to worry about lending, the housing market, and how companies and governments with high leverage will be affected by higher borrowing costs.
While it’s clear that the markets have recently retreated from their all-time highs, I still believe that the opportunity for positive returns exists, as the economy is doing well, wages are up, unemployment is down, and earnings are growing at very high rates.
I am leaning towards the US for equities, keeping interest risk at a minimum and using alternative strategies to help hedge risk. Late in 2018, I continue to focus on downside risk and protecting assets, while trying to take advantage of opportunities for growth.
I will be calling you to set up meetings for annual reviews of your personal accounts but, in the meantime, feel free to call me to set up a meeting. Also, I am always appreciative of you telling your friends, family members, adult children, and co-workers, etc. about the work that I have done for you.
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be used as a primary basis for investment decisions and should not be construed as advice meeting the particular investment needs of any investor. The information presented does not constitute a solicitation for the purchase or sale of any security. When considering the performance of the international markets, we used the Vanguard FTSE All-World ex- US Index, and for the US market performance we considered the S&P 500.
Investing involves risk and the potential to lose principal. Past performance does not guarantee future results.
05/19
Sincerely
Jordan Kerner
Financial Advisor, Waddell & Reed, Inc.
Office: 475-619-2240 | Cell: 917-301-7274 | Fax: 203-557-6262
www.jordankerner.wrfa.com | jkerner@wradvisors.com
495 Post Rd E Ste 209| Westport, CT 06880