Captain's Log
We hope everyone had a very Merry Christmas and a Happy New Year. I think I made it until about 10pm on New Year's Eve before I fell asleep in the man room watching TV. What else is new! I can't believe another year has flown by already. Where does the time go?
We were able to take some time off over the holidays to relax, which was nice. I personally spent a good bit of time over the holidays educating and updating myself on market trends and insurance product updates for the New Year. Our institutional wealth management team believes that with the passage of the new tax bill, the markets should continue on an upward trend for another 12-18 months. Companies are profitable, GDP is rising, consumer sentiment is the highest it's been in 17 years, unemployment is low, wages are rising, consumer spending is growing, and business owners are as confident as they've ever been. Wow, does that sound great or what!
Well, here's the flip side to that coin. The current bull market is now approaching 9 years, which is double what a normal bull market lasts. Many believe that stocks are becoming overpriced and PE ratios are starting to get too high. Our national debt continues to rise, and at some point that will become a major problem. North Korea is a global threat, and if not handled properly could turn into a nuclear war. We don't think that will happen, but needless to say if it did things could get quite ugly. Not to mention all the political strife we have in our own country, as well as around the world. I could go on, but I think that's enough to make the point. At some point, there will be a major correction. What's your "downside protection plan"?
In my opinion, here's the bottom line for 2018 - we believe there will be more market volatility, but markets will still trend up (secular bull market) for a while. Our team has hedged against this by moving more to money managers with an active management approach. Why? Because it's a proven fact that "active managers" do better than "passive managers" during times of high market volatility. This is especially important the older you are since you don't have as much time to make up for losses in your portfolio. In other words, don't get greedy and expose yourself to a bunch of risk if you don't need to! Sometimes it makes sense to count your blessings and take some money off the table for future use. Focus on keeping your safe/risk ratio in line with your age and income needs. If you're unsure on how to do this, we can sit down to help you figure it out. We have some very advanced methods to help you sort it all out, and I'd encourage folks that are not already clients to take advantage of this free service and build your own Chart Your Course Retirement Plan.
Stay warm and HAPPY NEW YEAR!
And, as always, remember -
The purpose of the money dictates where you put it.
Until Next Month,
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