Professional Investment Management
Financial Guidance
Since 1992 - Celebrating 26 Years
Tudor Financial April 2018 Update
"A Full Life, Secure Future"
Visit our website at: www.tudorfinancial.com

Finally Some Normal:   Those that forgot what normal markets feel like got their first dose of normalcy in February after a two-year hiatus. Expecting consistent s tability of investment markets is not rational - like asking for no rain in summer. Markets have historically corrected (10% or greater decline) once or twice a year. Since markets bottomed nine years ago March 2009, there have been five corrections in that long timeframe - well below average. The just-ended March quarter gave the S&P 500 its first negative return in nine quarters. However, as markets vacillate within arm's reach of all-time highs, investors should note that none of history's market declines have been permanent . (BTN Research)

The question for investors now: with equity markets currently 8% below their highs, will they continue to be moved by tariff discussions and higher interest rates? (1)
What Happened in April?: While investors fixate on forces that impact their investments, there are few factors so strong as interest rates. A good proxy for interest rates is the 10-Year government bond, and looking back in history, the rate on that bond hit a high of 14.96% in August 1981 and 35 years later hit a record low of 1.46% in June 2016.

If you wonder how bonds and other income securities do in the face of rising rates, look no further than the current year: on a price basis, a basket of "safe" bonds is down more than 3% year-to-date. This decline has occurred because the 10-year treasury yield has officially risen to the psychological 3% level for the first time this month since record lows in 2016. Real estate valuations have declined significantly too - a basket of real estate securities is down nearly 10% on the year. Remember that interest rates are a weight on all asset classes - no assets escape its impact. We would urge investors to watch rates keenly this year - interest rates may shake investment returns in 2018. (1)
Tudor 2018 Annual Seminar
While we are happy to report that our firm works with clients in 31 states across the U.S., local clients had the opportunity to participate in our annual seminar held on March 20, 2018. We want to thank our attendees for record sign-up and attendance this year.

The 2018 presentation provided details regarding cybersecurity, the dangers of IPO's, the newest retirement studies, why quality matters in investing, how to identify market bubbles and when bull markets end. Thank you to all for your enthusiastic attendance and participation. Join us again for a series of new topics next year.

Top Millionaire Jobs:

1. Manager 2. Professional 3. Education 4. Information Technology 5. Healthcare

(Source: Spectrum Group 2017)
One of the Best Ways to Accumulate Wealth: We are sold on quality stocks for a reason. Studies consistently show that quality stocks hold up better in market declines, are less volatile than overall markets, have less business risk, can be a source of consistent (dividend) income and, if purchased when out of favor, can produce higher-than-market returns. $100,000 in the MSCI Quality Index invested just 15 years ago is worth $471,000 through the end of March 2018. The MSCI World Index (not filtered by quality) would be worth $403,000 in the same timeframe. Is there any wonder we exclusively use high quality, financially strong company stocks in our individual stock portfolios? (Source: GMO - The Case for Quality, AQR Capital - Quality Outperforms, Atlanta Capital - Quality the Third Dimension, www.msci.com: MSCI World Quality Index)

Biggest Tax Change in Decades
 On December 17, 2017, the new Tax Cuts and Jobs Act was signed into law. This tax bill represents the largest sweeping tax law changes in several decades. Investors should chat with their tax professionals in 2018 to discuss how these changes will impact them.

Big changes in the new law include the elimination of the exemption for each household member, an increase in the standard deduction and limits on deductibility of taxes. (Source: WSJ Guide to Your Taxes)
Save Another $2,500 Year
A study published in the Journal of the American Heart Association and outlined in the New York Times confirms that regular exercise lowers healthcare costs $2,500 annually on average. The study concluded that inactivity costs the world economy almost $68 billion annually in medical expenses and lost productivity. In the United States alone, the total was almost $28 billion. (Source: NY Times: What's the Value of Exercise?)
Your Financial Quote: " Inflation is taxation without legislation.” – Milton Friedman
What Have We Done?

"Strategy Determines Outcome - Securities are Merely Tools"
Asset allocation (designed for conservative, pension and 401(k) investors): Our Spectrum Asset Allocation Strategy (designed to migrate to and invest in the top -ranked choices of a broad basket of fourteen asset classes) is a well-diversified and excellent risk-adjusted approach for long-term investors. Its success hinges on its well-researched reallocation methodology. This strategy, despite recent market volatility, continues to largely hold stock allocations. Allocations consistently adjust as the market environment changes. (2)

ETF Strategies (designed for conservative to aggressive investors): Our ETF Strategies can satisfy the goals of a wide range of clients. ETF securities are selected from a filtered universe of 130 choices which are evaluated based on well-researched ranking formulas. Our ETF Strategies continue to hold a healthy dose of diversified stock securities - allocations have not yet changed dramatically despite recent volatility. (2)
Legacy Growth Strategy
Legacy Growth & Income Strategy
Legacy Dividend Growth Strategy
High Quality Individual Stock Strategies
Designed for Qualified* Equity-Oriented Growth and Income Investors
Our   Legacy Growth Strategies   focus on the financially strongest companies in the stock universe. Less than five percent of the companies listed on the New York Stock Exchange qualify as candidates. These strategies are a testament to the philosophy that investors can achieve excellent returns from the highest quality companies in the stock universe without taking excessive risks. (2)

Legacy Growth & Income Strategy had no stock candidates available for purchase through year-end 2017 and early 2018 due to market valuation levels. This shows how effective this strategy is in identifying market overvaluation. Recent declines provided an opportunity to put cash levels to work in new positions. Legacy Growth & Income is currently nearly fully allocated to good, quality companies.

Legacy Growth Strategy is designed for growth investors that enjoy owning quality faster-growing companies purchased at bargain prices.

Legacy Dividend Growth is our most conservative individual stock strategy and is designed for those that prefer a growing income stream over time with less emphasis on capital appreciation.
What are we doing now?: Volatility does not hinder our client long-term goals. Clients are positioned in ideal strategies based on our analysis of their particular objectives and growth/risk personalities. Large adjustments are not required when volatility occurs - we provide growth and cushion based on individual needs. This is contrary to slinging investment allocations to frothy, shiny objects outside of a consistent strategy.

We believe that growth strategies have promise of good returns in 2018 - but will keep an eye on interest rates.

Enjoy the week... 

Grant S. Donaldson, MS, CPA 
* Minimum portfolio size $500,000
(1) yahoofinance.com, S&P500 historical data, Barron, Morningstar.com, Vanguard benchmark returns
(2) Information available upon request
Past performance is not indicative of future results.  Nothing in this communication should be construed to contain a solicitation to buy or an offer to sell any security.  Some information contained in this communication has been provided by sources other than Tudor Financial, Inc., the accuracy of which is the responsibility of the provider.  Advisors affiliated with Tudor Financial are Registered Reps. of Westminster Financial Securities, Inc.,40 North Main Street, Suite 2400, Dayton, Ohio 45423, member FINRA/SIPC. If you would like a copy of our Schedule ADV Brochure, a written disclosure statement outlining our background and business practices, please contact our office.