Quarterly Investment Update
Markets came out of the gate strong to begin 2019. The S&P 500 Index of large U.S. companies was up over 13.6% in the first quarter and international stocks were up in the 10% range. It was the biggest quarterly gain in nearly a decade for the U.S. market and it has been a rapid recovery following a rough finish to 2018.
Over a three-month period toward the end of last year, U.S. stocks came painfully close to a 20% “bear market” decline. Non-U.S. stocks fared slightly better, but still registered double-digit losses. It was one of those difficult periods for investors that unfortunately happen quite regularly.
It is interesting to note that the market spike this year has occurred in the face of concerns over a slowing economy. The Federal Reserve has signaled a pause in interest rate increases, due to weaker economic data points in recent months. Markets seemed to put a positive spin on the Fed news, but it is virtually impossible to know if the focus will remain on the good side (steady interest rates) or the bad side (slowing growth) of the same economic story.
As we often say, to reap the benefits of stock ownership requires the fortitude to stomach the dips and declines. Big downturns can be scary and there is no way of knowing exactly how deep a market drop will be. During the recent bull market, when U.S. stocks had positive returns in eight of the past ten years, they also weathered double-digit drawdowns in
of those ten years. It can be a bumpy ride, even during the good times.
As we do every year, we offer you an updated copy of our Form ADV disclosure brochure. It will be uploaded to your portal vault and can also be found