Trusted Contact Form
If you have not met with us recently for a review meeting, we strongly encourage you to request a Trusted Contact form. If you were incapacitated, it gives us permission to speak freely with anyone you name, such as spouses or children, about your finances. Please let us know if you’d like us to send you the form.
Increase in Charles Schwab Paperwork
If you recently started receiving a larger amount of paperwork in the mail from Schwab, it is most likely because you haven’t logged into their website in a long time (if ever). If you have not created a login yet, please go to www.schwaballiance.com and click on New User. Once logged in, click on Profile and then Paperless to update your settings. They will continue sending paper confirmations until you create a User ID to verify your account information and email are accurate. Any questions, call Schwab @ (800) 515-2157.
Market Recap: April Showers Bring May Flowers
In the market commentaries in February and March, we mentioned that the stock market was overvalued and overdue for a drop. The drop finally arrived in April. The good news is that May was a bounce-back month.
The S&P 500 gained over 4% this month, while the Dow Jones Industrial Average gained 2.3%. Please look at your own statements to see your individual performance and give us a call if you have any questions.
Presidential Election Update: Potential Impact on Your Portfolio
It seems most people have a strong opinion about the 34 count felony conviction of Donald Trump. It is our job to set politics aside and analyze how it might impact your portfolio. His team has vowed to challenge the decision and attempt to reverse it. If it stands, there are several factors to consider.
As a felon, he may have his ability to travel from state to state limited or possibly be put under house arrest. He will have his passport revoked, so his international travel would be limited which may sway some independent voters.
The main factor we’re considering is whether the judge will sentence Trump to probation, jail time, or both. At this point, anticipation is building for the sentencing with Judge Merchan which has not been scheduled yet. There is a good chance that if the appeal process drags out, Trump would not see jail time or probation until after the Presidential Election.
In summary, it appears at this time that this situation will not impact our portfolios due to the lengthy appeals process.
Reasons for Optimism for a Strong End to the Year
Despite so many uncertainties, we are still optimistic that the stock market will end the year strong. While past performance cannot predict future performance, and our research could certainly change, there are currently 4 main reasons we are predicting a strong end to the year.
1. Election Year “Window Dressing”
First, in our opinion, every President who is running for election wants to get re-elected, so they make moves that potentially “window dress” the economy and stock market before the election. Please check out the chart in this article for a refresher.
2. Positive Long-Term Indicator
Second, in late April of 2023, one of our most important longer-term indicators shifted from negative to positive. It had been negative since the first quarter of 2022, when we saw the bulk of our previous market volatility, and then it flipped positive to participate in the recovery during 2023. It remains positive at this time, so we remain optimistic about future performance.
3. All Four Indicators Positive
Third, our short-term and intermediate-term indicators are still positive, so four out of four preferred indicators are currently positive.
4. 200-Day Moving Average
Lastly, while past performance cannot predict future performance, the 200-day moving average of the S&P 500 has turned and has been heading up rather than down. This is a longer-term trendline, and in the past, it has had some success identifying a change in trend.
We had a different indicator last year (Source: inverted yield curve) declare that there is a chance we’ll have a recession within the next year. We’re hoping that the Federal Reserve will reduce interest rates in 2024, which could potentially provide some stability moving forward.
Speak With a Trusted Advisor
We’d love to have a review meeting with you to discuss investments, retirement income planning, college planning for kids or grandkids, tax preparation, health insurance, including Medicare supplemental and prescription drug plans, and a variety of other financial planning topics. Please contact our office at (586) 226-2100 to schedule a meeting!
If you’ve had any changes to your income, job status, marriage status, a new birth in the family, 401K options, address, risk tolerance, or any other financial changes, please get in touch with us right away.
Sincerely,
with contributions from Robert Wink, James Wink, Zachary Bachner, James Baldwin, and Daniel
Sources:
- https://finance.yahoo.com/quote/%5EGSPC/history/
- https://finance.yahoo.com/quote/%5EDJI/history/
- https://www.shermanportfolios.com/indicators
- https://www.carsongroup.com/insights/blog/two-more-bullish-pieces-of-evidence/
- https://www.forbes.com/sites/simonmoore/2024/02/06/the-inverted-yield-curve-continues-to-flash-a-recession-warning/?sh=1325948b15ac
- https://www.shermanportfolios.com/indicators
Notes & Disclaimer: Investment advisory services are offered through Summit Financial Consulting LLC, an SEC registered investment advisory firm. Registration does not imply a certain level of skill or training. Summit Financial Consulting Investment Advisory firm Representatives do not render tax, legal, or accounting advice. Insurance products and services are offered through Summit Financial Consulting, LLC. Please update Summit Financial Consulting LLC, if your investment objectives have changed or if the personal or financial information previously provided has changed. The investment advisory disclosure document that describes Summit Financial Consulting investment advisory services account is provided to you annually, but additional copies are available upon request. Investing involves risk, including the risk of a total loss. Stock market indices, like the S&P 500 Index, are unmanaged groups of securities considered to be representative of the stock market in general or subsets of the market, and their performance is not reflective of the performance of any specific investment. Investments cannot be made directly into an index. Historical returns data are calculated using data provided by sources deemed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness or correctness. Dividends are not included in index returns. This information is provided “AS IS” without any warranty of any kind. Past performance is no guarantee of future results. This communication is only intended for recipients who reside in states where our agents are licensed to sell these products. All guarantees are subject to the claims paying ability of the issuing insurance company. Past performance cannot predict future performance. It is not possible to invest directly in an index. Representatives of Summit Financial Consulting LLC offer tax preparation services through Summit Tax Services. Summit Tax Services is a DBA of Heemer Klein & Company and they are owned and operated independently.