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.
In the month of October, the Nasdaq lost 9.2%, the S&P 500 lost nearly 7%, the DOW lost 5%, the Russell 2000 small cap index lost almost 11%, and bonds on average had another rough month. Source: https://finance.yahoo.com/quote/%5EGSPC/history?p=%5EGSPC,
Clients may have noticed several transactions last month. This can happen when volatility spikes. Within our in-house managed portfolios at TD Ameritrade, as we stated in our last market commentary 4 weeks ago, we sold large amounts of stock because our research said a rough patch was coming. The good news is we took this opportunity of increased volatility to replace almost all our mutual funds in our portfolios with TD Ameritrade’s new cost-free ETF’s (Exchange Traded Funds). ETF’s by design provide similar diversification to mutual funds, however, are up to 90% less expensive and trade by the second, unlike mutual funds that trade at the end of the day. This allows us to trade throughout the day and can potentially help us enter the market during rallies, and potentially minimize losses during selloffs.
This is a time where buying independent research and reviewing the portfolio holdings daily can pay off for our clients. We can’t always perfectly time market selloffs and rallies, and we did give back gains from the past couple months, but not nearly as much as the market lost, and we are still solidly up for the year to date. We had Utilities, Gold, bonds, and Real Estate which held up rather well during the downswing. Please check your statement or give us a call to discuss your personalized portfolio rate of return.
If you were invested in a tax-managed portfolio, please remember that this is part of your “later bucket”, so this portfolio will more closely mimic the index performances. If you’d like to discuss the performance of any portfolio at any time, please don’t hesitate to give us a call.
As predicted, the Senate was retained by the Republicans and the House of Representatives was taken back by the Democrats. This ushers in an era of political instability for the next two years. The Democrats will most likely make it more difficult to pass laws, the same way Republicans did for President Obama’s last term. Democrats have said that since they will chair the committees in the House, they will work to impeach President Trump, issue subpoenas, call hearings, request Trump’s tax returns, and investigate possible financial ties or conflicts of interest with Russia. All of that would come on top of Robert Mueller’s ongoing investigation into collusion during the 2016 election. Basically, the Democrats look to be a thorn in Trump’s side.
This has the potential to slow down or de-rail President Trump’s economic agenda. Our research is showing signs that the economy is growing, but just not as fast as it was this past summer. On the margin, this is a negative as far as stock traders are concerned. We are currently allocated defensively to combat short-term volatility in the markets and will continue to do our best to buy low and sell high whenever possible through our daily research process. Even in a sideways market, there is potential to make money by buying low and selling high.
We will let you know if there is a situation which 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. Please feel free to forward this commentary to a friend, family member, or co-worker. If they would like to be added to our complimentary commentary, please send us an e-mail at email@example.com at your earliest convenience. If you have had any changes to your income, your job, your family, your health insurance, your risk tolerance, or your overall financial situation, please give us a call so we can discuss it.
Thank you for your confidence and referrals!
Bob, Ken, and Jim
Summit Financial Consulting
“In our age there is no such thing as ‘keeping out of politics.’ All issues are political issues, and politics itself is a mass of lies, evasions, folly, hatred and schizophrenia.” Source: George Orwell, 1946
“There is nothing in the business situation to warrant destruction of values that has taken place on the stock exchange during the past week.” Source: John D. Rockefeller, October 30, 1929
A day in a U.S. hospital costs an average of $5,220, compared with $765 in Australia or $424 in Spain. Source: -Vox.com, October 4, 2018
Netflix is on pace to add 27.4 million subscribers this year. That is nearly as many as HBO added in the past 40 years. Source: –CNBC, October 17, 2018
New research suggests that dogs crave eye contact and become depressed and anxious when their owners spend too much time staring at their smartphones. Source: -DailyMail.com, September 18, 2018
It is estimated that half of all cellphone calls will be from scammers by next year. The number of fraudulent calls increased from 3.7% of total calls in 2017 to 29.2% in 2018, and is expected to jump to 44.6% by 2019. Source: -MSN, September 19, 2018
About one-third of the people who were exposed to a fake print advertisement that described a visit to Disneyland and how they met and shook hands with Bugs Bunny later said they remembered or knew the event happened to them. The scenario described in the ad never occurred because Bugs Bunny is a Warner Bros. cartoon character and wouldn’t be featured in any Walt Disney property. The frightening thing about this study is that it suggests how easily a false memory can be created. Source: –University of Washington, June 11, 2001
From 2017 to 2018, the annual cost of a private room in a nursing home grew by 6.67%, cracking the six-figure mark. The national median cost for a room in a nursing facility is now $100,375 annually. Source: -CNBC, October 20, 2018
Disclosures regarding our performance reporting: Because some clients are in the 10% tax bracket and others are in the 37% Federal tax bracket, we have decided to report performance before taxes. If you have a non-qualified account, please feel free to contact us to determine your individualized rate of return after tax. All of Summit’s performance is after our 1.25% advisory fee that is deducted monthly. Your fees may be higher or lower depending upon the amount of assets invested with our firm. Feel free to contact us to receive online access so you can see your personalized rate of return. The Aggregate bond index we use is ticker: AGG. All dividends and distributions are reinvested and included in the performance. The S&P 500 index quoted above does not include dividends within the performance. If a holding within our portfolio does pay a dividend or other income, it is reinvested, so our performance does include dividends. This report has been prepared from data believed reliable, but no representation is made as to accuracy or completeness. Total return and principal value will vary depending upon the deduction of advisory fees, brokerage commissions, reinvestment of dividends and other earnings or fund charges. This information is provided to you in combined form, solely for your convenience and ease of review and is not an offer or solicitation to buy or sell any securities. In order to verify that all account values and transactions are accurate, we encourage you to compare the information provided in our statement with the statement you receive directly from your custodian. All written content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Past performance does not guarantee future results.
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.