2019 4th Quarter Newsletter
As always, let me start by thanking you for being such great clients and friends. Let me also thank you all for trusting me with your hard-earned money and financial security. Many of you have trusted me with new investments this year and to those that have helped me with referrals, a special thank you.
Ten months of the year are complete. We had one of the most beautiful falls that I remember and winter is coming. I hear from good sources that it will be bring a lot of cold weather so get ready.
The stock market has had a very good year so far from a performance standpoint. Most of you probably don’t recall that on Aug-14, 2019 the Dow Jones Industrial Average was down 800 points. Or, that last December the market was down almost 10% for the month. I do remember those experiences as well as others and am now cautiously optimistic.
Issues such as a potential recession and fears of higher inflation, slowing economic growth and slowing earnings growth seem less imminent right now. Governments all over the world are using monetary policy to stimulate their economies and in many countries interest rates are negative which is positive for stocks. The biggest cause of volatility in the market continues to be due to the actions of President Trump and how he is dealing with foreign nations, particularly China. Corporate earnings have been better than expected. On the other side, GDP growth has exceeded expectations and the economy is doing well, inflation has been in check and the consumer strength is good in most areas of the country due to high employment and wage growth.
As I said in my last newsletter, the FMOC (“The Fed”) has decreased rates a few times as Trump wanted and now Trump is moving hard to do a deal, any deal with China to help his re-election efforts. The President has used the economy’s and stock market’s growth as a measuring stick of his success. It is almost unheard of for a President not being re-elected during periods of economic prosperity and Trump knows that.
There are still risks to the markets and economy for sure. The deal with China may fall apart or the deal may not be significant enough to win over markets.
As I said in my last couple of newsletters, the adage, "Pigs get fat, hogs get slaughtered" cautions investors against excessive greed. I tend to agree and focus on capturing profits when I think it appropriate. At this time, I am focused on investments that benefit from the market yet historically have less volatility such as, reducing the focus on aggressive growth and using more dividend growth funds since dividends historically have helped manage some portfolio risk when we see extreme market sell offs. I am not making bets on credit or duration in fixed income after bonds have had such a great run in 2019 and I have added to balanced funds (funds that have historically invested in both bonds and stocks instead of just stocks) to help manage risk.
I continue to evaluate my clients’ investments to help make sure they are in line with their objectives, risk tolerance and time horizon.
Thank you very much. I look forward to seeing you all soon.
This material represents an assessment of the market environment as of 11-07-2019 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.
The Dow Jones Industrial Average is an unmanaged index that cannot be directly invested into. Past performance does not guarantee future results.
Diversification and asset allocation are investment strategies that can help manage risk within your portfolio but they do not guarantee profits or protect against loss in declining markets.
All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
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