Disclaimer: These are the views of Summit Financial Consulting and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.
As of May 8th, 2018, the DOW Jones Industrial Average is down -1.45% for the year. Our aggressive portfolio at TD Ameritrade is up over 3.0%, which is a 4.45% outperformance in a little over 5 months. Our more conservative portfolios are also outperforming as we decided to sell our interest rate-sensitive investments including treasury bonds before interest rates increased rapidly (the 20-Year Treasury Bond is down over 6% year-to-date – Source: https://finance.yahoo.com/quote/TLT?p=TLT).
We updated our research process with six different independent research companies about 18 months ago and also hired a dedicated research analyst in the office. Our results were great in 2017 and have been especially encouraging so far this year when compared to the overall market. Any time you can make money in a down market (stocks and bonds are down), it’s great, in our opinion. Past performance is no indicator of future performance, but we’re going to continue our process of reviewing our TD Ameritrade portfolios daily.
Now that tariff hysteria has calmed, the latest trending news and potential market mover is President Trump’s withdrawal of the United States from the Iran nuclear deal. Israel and Saudi Arabia applauded the move, while many European allies voiced disapproval. The Iranian parliament burnt U.S. flags to protest. Financially speaking, Boeing will miss out on $10 Billion dollars of sales, but CEO Dennis Muilenburg told investors last month that they already have a backorder of over 6,000 commercial jets worth $486 Billion and that they never put the Iran order on their financial statements because of the political uncertainty.
The potential for reinstatement of Iran sanctions likely helped drive the price of crude oil over $70 for the first time since November of 2014. This is continued good news for our TD Ameritrade accounts as we purchased an energy fund in our portfolios earlier in the year, which is up over 15% since the beginning of March as oil/energy continues to outperform.
At this time, despite the headlines, we do not see any immediate negative financial consequences to the Iran announcement. Overall, we believe there is a higher probability that the stock market will be hitting all-time highs again soon rather than testing the lows again. Our short-term indicator is still green at this time. We will continue to monitor the market’s movements daily, and do our best to buy low and sell high whenever possible. Even in a sideways market, we can potentially make money by managing risk accordingly. With our portfolios hitting fresh all-time highs yesterday (May 10, 2018) we were able to sell a portion of our S&P Growth equity position and lock in some gains.
We will continue to take it one day at a time and let you know if there is a situation that calls for immediate attention. If you have any questions about taxes, your investment portfolio, our 401(k) recommendation service, or anything else in general, please give our office a call at (586) 226-2100.
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Bob, Ken, and Jim
Summit Financial Consulting
Due to the soaring housing prices, many people are moving away from the San Francisco Bay area. Because of this, a one-way U-Haul rental from San Jose to Las Vegas now costs roughly $2,000, compared to just $100 for a truck going in the other direction. – Newsweek.com, February 2, 2018
Even though Amazon made a recorded $5.6 billion in profits in 2017, the company paid $0 in federal taxes, thanks to a number of tax credits and breaks for stock options. – FiveThirtyEight, Friday, March 9, 2018
Forty-three percent of music revenues came from streaming last year. – Tech Crunch April 23, 2018
In 2017, fourteen states set a new record for its low unemployment rates.. – TheHill.com, April 23, 2018
Despite fears that President Trump’s tariffs on imported solar equipment would be a job killer, new solar-industry jobs are increasing. The Solar Energy Association initially forecast 88,000 lost jobs this year but has revised its estimate to a gain of 22,000. – Bloomberg.com, April 10, 2018
Competitive video gaming is now a $1.5 billion-a-year industry and the world’s fastest-growing spectator sport. E-sports tournaments and live streams drew 258 million unique viewers in 2017- more than all of the watched NFL regular-season games combined. – The Wall Street Journal, April 23, 2018
Every book to hit #1 on the New York Times Bestseller List in 2018 so far has either been about contemporary politics in general or President Trump in particular. – CNN, April 16, 2018
Next year, 20-to-35-year-olds are poised to overtake 52-to-70-year-olds as a higher percentage of the U.S. population. – Research Center, March 1, 2018
In March of 2018, Portugal produced more than enough renewable energy to meet the entire country’s mainland electrical demand. Fifty-five percent was produced through hydro power, while 42% came from wind. – NPR, April 5, 2018
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Summit Financial Consulting LLC is independent and is not an affiliate of Gradient Securities, LLC. Investment advisory
services offered through Summit Financial Consulting LLC, a Registered Investment Advisor in the State of Michigan.