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.
Special Tax Notice
If you only have IRA or 403(b) investment accounts, you can most likely submit your tax return now if you received your 1099’s. If you own a non-qualified (non-retirement) investment account, it is prudent to wait until March 15th to complete your tax return because it is always possible a revised tax statement will be sent out.
If you would like our tax preparation firm, Summit Tax Services, to prepare your taxes, please let us know and we’ll walk your investment tax documents down the hall for you for preparation. If you would like to receive a quote to see how much we can save you, please give our office a call at (586) 459-5340. Some clients have saved over 50% versus last year’s tax preparation bill. We can mail you an envelope to send in your documents, or we can send you an encrypted document request e-mail for security.
Volatility! If you’ve turned on the news, went online, or browsed social media the last couple of weeks, you have probably noticed the hysteria regarding the Stock Market. Investors had almost been lulled to sleep by the steady upward climb since Election Day of 2016, so any volatility in the market really tends to stick out, let alone, historical short-term losses as the Dow was down 1,841 points in just two days (source: finance.yahoo.com). As of February 8th, the S&P 500 Benchmark was down over 11.3% from its January all-time high (source: finance.yahoo.com). As always, we want to remind our clients we review our portfolios and investment holdings daily, and we always have our hand on the wheel whether we’re reaching new highs in the market or experiencing big swings of volatility.
Our opinion is that the market was due for a correction for some time now as investors were able to take some profits from the last 15 months. Our TD Ameritrade managed portfolios did experience some volatility but have rebounded nicely. Our short-term market indicator turned red for a couple of days but changed back to green fairly quickly. During the selloff, we took the opportunity of lower prices to add Consumer Discretionary stocks into the majority of our portfolios. We believe corporate earnings are going to continue to increase, and due to wage increases and tax reform, consumers should continue to use their larger paychecks on discretionary purchases for the foreseeable future. This could continue to fuel the stock market.
We did some research and reviewed historical market corrections dating back almost 40 years and found one underlying consistency: The market tends to thrive off of 10% corrections. This recent selloff was unique in that it was the quickest move from a record high to correction territory (10% or more loss) in history. We attribute this to the fast pace and ever evolving stock market that consists of algorithmic and computer trading. It just moves faster these days. In any case, we found that a year after the lows of a market correction, stocks are up a median of 23% after one year, and after two years up 36% (Source: https://lplresearch.com/2018/02/09/stocks-enter-correction-territory-but-should-investors-worry/)
This is a very bullish sign, especially taking into consideration our economy is improving. We will continue to take it one day at a time and let you know if there is a situation which calls for immediate attention. If you have any questions about tax season, your investment portfolio, our 401(k) service, or anything else in general, please give our office a call at (586) 226-2100.
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January was the 88th consecutive month of job creation, the longest streak of continuous hiring on record. – The Wall Street Journal, February 2, 2018
Hawaii’s governor confessed he was unable to correct the state’s erroneous warning of an imminent missile attack for 17 minutes because he had forgotten his Twitter password. – Newsweek.com, January 23, 2018
Today, there are now 1.26 vehicles on the road for every licensed U.S. driver, the most ever. – The New York Times, January 3, 2018
In 2017, murders fell in America’s largest cities, and the two biggest, New York and Los Angeles, are at or near the lowest levels of deadly violence in their modern histories. – Marketwatch, January 5, 2018
NFL players make an average of $1.9 million a year, 15% declare bancruptcy, while Sports Illustrated estimates that 78% end up coming close and/or experience significant financial stress. – Yahoo Finance, January 13, 2018
Russia’s capital, Moscow, received only six minutes of sunshine in the month of December. Prior to this, the darkest month in Moscow was recorded in 2000, when the city saw only three hours of daylight. – The International News, January 17, 2018
For the first time in history, health care has surpassed manufacturing and retail to become the largest source of jobs in America. – TheAtlantic.com, January 9, 2018
“Despite the enormous wealth creating-power of the stock market, looking at it too closely can be terrifying. A daily look at portfolio values means you see a loss 46.7% of the time, whereas a yearly look shows a loss a mere 27.6% of the time.” – The Center for Outcomes, February 6, 2018
Summit Financial Consulting LLC
43409 Schoenherr Road, Sterling Heights, MI 48313
Phone: 586-226-2100 Fax: 586-226-3584 E-mail: firstname.lastname@example.org
Securities offered through Gradient Securities, LLC (Arden Hills, MN (866)991-1539) Member FINRA/SIPC
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.