This Week from Jesse Hurst
Jesse W. Hurst, II

Horizon/Impel Wealth Management 
Investment Committee Perspectives
May 2019

The joint investment committee of Horizon and Impel Wealth Management met today to review first quarter performance of our investment models, and to review the economic outlook and its impact on our asset allocation strategies.  We began by reviewing the performance of our main model portfolios.  We were very happy that all of the model portfolios have continued to outperform their risk adjusted benchmarks over the most recent one, three- and five-year periods of time.  This is especially satisfying, as over the last twelve months we have experienced significant bouts of volatility, especially during the fourth quarter, when we saw stock markets around the globe sell off.  
We have gone from an economic outlook in the 4th quarter of 2018, when there was great fear that the Federal Reserve Bank was raising interest rates too aggressively and with trade and tariff negotiations in full swing, that there could be potential damage to the global economy based on negotiations between China and the US.  There were also political fears after the mid-term elections that lead to a split Congress, and the outcome of the Mueller investigation was still uncertain. During this time period, markets in the US severely sold off, dropping approximately 20% from their September 20th peak, to their December 24th low.  
We witnessed the "yoga Fed" show extreme flexibility. As late as October 2018 they were projecting at least three interest rate increases for calendar 2019.  By December, they had reduced that to two increases.  In January 2019, the Federal Reserve Bank indicated that they would be much more "patient and data dependent". Subsequently, in March, they indicated that they were not projecting any additional interest rate increases for the balance of the year.
In addition to this, fourth quarter earnings that started to be reported in mid-January, came in above expectations. Additionally, it seems that President XI of China and President Trump are moving closer to a trade agreement between the two nations which would likely be a positive for the global economy.
There are a number of leading economic indicators that typically point towards the potential for a future recession.  A number of these had peaked and started to move in the opposite direction during the fourth quarter of 2018 and into early 2019.  The good news is that some of these have reversed course again, including the index of leading economic indicators, the purchasing managers for both manufacturing and the service sector of the economy and weekly jobless claims. While we will eventually have a recession at some point in the future, as the economic cycle has not been abolished, we may have more time and more runway until that occurs than we may have feared a few months ago. 
One additional thing that could be constructive for the US economy would be if we could find some spirit of political cooperation. If House Democrats and Senate Republicans could work together with the administration on a infrastructure spending bill, it could potentially be additive to the US economic growth.  We will continue to watch.  We know as we get closer to the 2020 presidential election season, the likelihood of agreements and deals becomes less likely.
Against this backdrop, the committee made the decision to make no changes to our portfolio models at this time.  We are cautiously optimistic about the potential for positive outcomes and resolutions towards around the issues discussed above and their potential impact on the economy. The investment committee will continue to watch and monitor these and other issues and stand ready to take action or make adjustments if or when necessary. However, we have found that it is usually best practice to take no action when none is warranted. We believe that is where we are from an economic and investment place today.  Should you have any questions regarding these notes, please do not hesitate to contact your advisor.  We appreciate your confidence in our committee and our process. It is a responsibility we take both personally and seriously.

*Investments in securities do not offer a fix rate of return. Principal, yield and/or share price will fluctuate with changes in market conditions and, when sold or redeemed, you may receive more or less than originally invested. No system or financial planning strategy can guarantee future results. Investors cannot directly invest in indices. Past Performance does not guarantee future results. *
The views stated in this letter are not necessarily the opinion of Cetera Advisors LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change with notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.


Jesse W. Hurst, CFP®, AIF®
Investment Advisor Representative

Your Team at Impel Wealth Management

2006 4th St.
Cuyahoga Falls, Oh. 44221
Phone: (330)800-0182
Fax: (234)312-0460

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Impel Wealth Management 
2006 4th Street, Cuyahoga Falls, OH 44221    
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