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. 

Solid first Half of the Year, but is there a Tech Bubble?

Overall, the first half of the year was very solid for our portfolios, especially in the 2nd quarter. Up until last week, the Nasdaq was nearly doubling the performance year to date of the Dow Jones Industrial Average and the S&P 500 (Source: Ycharts.com). However, the Nasdaq lost about 2% last week while the other indexes held their own a bit better. Some investors are worried that the sky-high valuations of large technology firms are a tech bubble that is getting ready to burst at any moment.

We have a good amount of technology within our portfolios at TD Ameritrade because it has been a high flyer this year. Our research says that the economy is speeding up overall from a GDP standpoint, and companies that have their earnings accelerating are normally the stocks that perform the best. At this point, the recent underperformance in technology stocks seems like a bump in the road that should continue to head in the right direction.

Bonds and the Nasdaq took some lumps last month while the Dow and S&P 500 held their own. Overall, it was a good quarter, but a mixed month. That’s how most of our portfolios looked as well in June, but up solidly for the quarter. We’re not making any large adjustments quite yet, but if technology doesn’t hold up well, we’ll be moving to a more defensive posture overall.

Our short-term indicator is still red on the market as a whole, meaning there is a chance for a short-term drop, but our intermediate and longer-term indicators are still green, pointing to an overall uptrend.

We’ll continue to review your holdings daily. If you are a client and disagree with any of the moves inside your portfolio, if you would like to update us on your risk tolerance preferences, or if you have had a dramatic change to your income or financial situation, please contact us to discuss it

Please feel free to forward this commentary to a friend, family member, or co-worker. If they would like to be added to our free commentary, please send us an e-mail at info@summitfc.net at your earliest convenience.

Interesting Points

In America, deaths from painkillers, opioids, and heroin have soared 50% in just one year. In Ohio, the coroners’ offices are running out of room to store bodies so they are bringing in refrigerated trucks. – The Week, June 16, 2017

“The Fourth of July is a constant reminder of how useless my dog would be in the event of a war.” – Anonymous

For the first time, the number of Netflix subscribers in the United States (50.85 million) now exceeds the number of cable subscribers (48.6 million). – CNBC, June 16, 2017

Tuition costs rose at the slowest rate on record, going up 1.7% in May from a year earlier. College tuition and fees have never, ever gone down in the nearly four decades that the measure has been tracked as part of the Consumer Price Index – Vicenews.com, June 16, 2017

The only days of the year in which there are no professional sports games- MLB, NBA, NHL, or NFL- are the day before and the days after the Baseball All Star Game. – The Bleacher Report

Roughly 60% of NBA players and 78% of the NFL file for bankruptcy within 5 years of retiring. – Forbes.com, February 9, 2015

“Americans learn only from catastrophe, and not from experience.” – Theodore Roosevelt

In the past 35 years, China has reduced the percentage of its population living in extreme poverty from 88% to less than 2%. – The Week, June 16, 2017

Only 12% of American homeowners have flood insurance, even though property owners are 26 times more likely to suffer flood damage than fire damage over the course of a 30-year mortgage. – CBSNews.com, June 14, 2017

Last year, about half of U.S. workers who get vacation days did not use all of them, leaving 662 million vacation days on the table. According to Nathan Lump, editor of Travel and Leisure Magazine, when people take time off, they tend to spend money. “If people took even one more day off a year than they do, that would add $33 billion to the economy” he said. – Marketplace.org, June 20, 2017


Summit Financial Consulting LLC

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