After a calm couple of months, May reminded us that markets can be volatile. The air came out of the market after four strong months, mainly due to trade concerns. Incidentally, the air is also coming out of many items we use daily. Did you know there is a global shortage of helium? This will not only effect birthday parties, but also weather balloons, blimps, airbags, cryogenics, rocket fuel and MRI machines. Helium is a non-renewable resource, made by the decay of uranium.
Trade talks and trade uncertainty are weighing on the minds of investors. Just when investors believed a deal was near, new threats and additional headlines popped up. Will the disputes escalate, or will they be resolved? Only time will tell.
The great news is the economy looks fairly solid. GDP growth is positive, and labor is in demand, while inflation remains low. These are ingredients for a positive stock market. Eyes will also be fixed on the bond market, as rates continue to drift lower.
Investors continue to pull money from equity stock funds, and the aforementioned volatility doesn’t help. Bond funds continue to receive flows, bidding up the values while helping to push down rates. Social Security will start to have fewer and fewer workers paying into the system. Soon there will be roughly two employees for every one retiree on Social Security. Why does social security matter? Social security will be a major source of income to many retirees. How do you avoid that fate?
Five issues that can impair your savings goals:
- Being too conservative in your investments
- Uncontrolled expenses
- Not saving enough
- Ignoring inflation
- Poor allocation/over allocation
Markets are still positive for the year. A well-balanced portfolio with stocks and bonds has performed quite well so far. Being too conservative and ignoring the ravages of inflation will, over time, will have a detrimental impact on your portfolio. Conversely, over time, the downturns will look like blips on your course. For those sitting on cash, now is a good time to deploy those funds as some sectors have gone on sale.
You will notice that short-term volatility is not in that list above. Smart investors do not let short term gyrations derail their long-term goals. The statistics are not promising for most retirees. Fidelity found that 82 percent of Americans do not have retirement plans, while the US Government Accountability Office reports almost half of older Americans have no money saved in retirement account. We are proud that our clients will not be a statistic.
Our advisors are always available to discuss your savings and investment goals for the today and the future.
Morgan R. Christen, CFA, CFP®, MBA, CDFA
Chief Executive Officer
Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. S&P data © 2019 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. The S&P 500 Index is a free-float market capitalization weighted index of 500 of the largest US companies. This index is calculated on a total return basis with dividends reinvested and is not available for direct investment. Stock is the capital raised by a corporation through the issue of shares entitling holders to an ownership interest of the corporation. Treasury securities are negotiable debt issued by the United States Department of the Treasury. They are backed by the government’s full faith and credit and are exempt from state and local taxes. The indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results, and there is always the risk that an investor may lose money. Diversification neither assures a profit nor guarantees against loss in a declining market. The information contained herein is based on internal research derived from various sources and does not purport to be statements of all material facts relating to the securities mentioned. The information contained herein, while not guaranteed as to the accuracy or completeness, has been obtained from sources we believe to be reliable. Opinions expressed herein are subject to change without notice. Chart provided from the US Government Accountability Office (US GAO)