T his Week from Jesse Hurst
Jesse W. Hurst, II
CFP® CERTIFIED FINANCIAL PLANNER™
AIF ® ACCREDITED INVESTMENT FIDUCIARY

What Difference Can A Year Make?
 
"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us..."  

Charles Dickens, A Tale of Two Cities
 
As we reflect upon the opening paragraph of Charles Dickens 1859 novel, it is obvious a year can make a tremendous difference. That is especially true if we are comparing the results of the financial markets between calendar years 2017 and 2018. 
 
Despite ongoing global political headlines from inauguration day throughout the year, including the Russia probe and the Mueller investigation, the threat of nuclear conflict with North Korea, pulling out of both the Paris Climate Accord and the Trans Pacific Partnership, trade and tariff issues with our European allies as well as our neighbors to the north and the south, US stock markets moved up nearly 20%. In contrast to the news and headlines, volatility was the lowest that we had seen in nearly 50 years, and the markets had positive returns every month. The markets seemingly behaved as if nothing could go wrong.
 
Heading into calendar year 2018, the set up could not have been better. Congress had just passed a tax cut for individuals, and the corporate tax rate was reduced to a level that made us competitive with our industrialized counterparts. There was a synchronized  growth pattern in play and over 90% of global economies had positive GDP, an occurrence that rarely happens. 
 
However, clouds forming on the economic horizon that foretold good times would likely not last indefinitely. As unemployment dropped to levels not seen in fifty years, the pool of available workers to fill the number of jobs open was shrinking. This would potentially lead to wage pressure and inflation concerns. This, in turn, would lead the Federal Reserve Bank to raise interest rates four times during the year. 
 
All of this led to bouts of volatility, just as investors were feeling confident and comfortable. We had double digit percentage drops in the market in January/February and then again during the fourth quarter of the year, when many segments of the market dropped 20% or more. There are some very unusual statistics about calendar year 2018, including the fact that none of the eight major asset classes that Ned Davis Research follows had positive returns of more than a couple of percent. This had not happened since 1972.  And, according to Deutsche Bank, over 90% of the 71 asset classes they follow were negative for the year, a phenomenon that had not occurred since they begin keeping track in 1901.
 
As we begin calendar year 2019, markets continue to be volatile. It is important to remember that volatility works both ways. Investors rarely consider sharp moves to the upside volatility, they simply consider them times of good returns. Just as clients are receiving their December 31 statements and seeing the impact of the fourth-quarter volatility, many of them are now seeing their account values rebound. We know that the issues that caused nervousness in 2018 have not abated. We still have issues with trade wars, Fed policy, and slowing economic growth which could lead to lower corporate profits.

However, we also know that having a plan, staying invested and diversified according to your risk profile and asset allocation goals are typically the best ways for investors to pursue and achieve their financial goals. There is no difference in these strategies today than there have been in previous market cycles and events. We at Impel Wealth Management stand ready to educate and guide our clients to help them weather the economic storms and reach their ultimate financial destination. If you have questions regarding your financial plan and how these issues impact you, please reach out to us. We are here to serve and work with you as we all "Move Life Forward "together.

Jesse


 
Investors cannon directly invest in indices. Past performance does not guarantee future results.
  


Weekly Market Commentary
February 4, 2019
 


The Markets
 
And, U.S. stock markets celebrated.
 
Last week, the Federal Reserve put itself on hold. The Federal Open Market Committee met on Wednesday, January 30, 2019, to discuss the state of the economy and determine policy. After the meeting, Fed Chair Jerome Powell offered a positive assessment of U.S. economic strength that was leavened with a few concerns.
 
"We continue to expect that the American economy will grow at a solid pace in 2019, although likely slower than the very strong pace of 2018...Despite this positive outlook...Growth has slowed in some major foreign economies, particularly China and Europe. There is elevated uncertainty around several unresolved government policy issues, including Brexit, ongoing trade negotiations, and the effects from the partial government shutdown in the United States...We are now facing a somewhat contradictory picture of generally strong U.S. macroeconomic performance, alongside growing evidence of cross-currents. At such times, common sense risk management suggests patiently awaiting greater clarity..."
 
The Standard & Poor's 500 Index (S&P 500) welcomed the news and delivered its best January performance since 1987, reported Reuters.
 
Earnings may have helped. Through the end of last week, almost one-half of companies in the S&P 500 had shared fourth quarter 2018 earnings. FactSet reported the blended year-over-year earnings growth - which includes earnings for companies that have reported and earnings estimates for companies that have not yet reported - was 12.4 percent. That's lower than the 20-plus percent growth companies have delivered since late 2017, and it's the fifth straight quarter of double-digit earnings growth.
 
There was good news to close the week, too. The Bureau of Labor Statistics reported far more jobs were created in January than analysts had anticipated, although unemployment ticked higher for the month because of the government shutdown, reported Bloomberg.


Data as of 2/1/19
1-Week
Y-T-D
1-Year
3-Year
5-Year
10-Year
Standard & Poor's 500 (Domestic Stocks)
16%
8.0%
-4.1%
11.8%
9.2%
12.6%
Dow Jones Global ex-U.S.
1.1
7.1
-14.8
6.7
1.3
6.2
10-year Treasury Note (Yield Only)
2.7
NA
2.8
2.0
2.6
2.7
Gold (per ounce)
1.9
2.9
-1.7
5.4
0.9
3.7
Bloomberg Commodity Index
-0.1
5.5
-9.9
2.2
-8.5
-3.0
DJ Equity All REIT Total Return Index
2.9
10.9
11.6
9.2
10.3
15.6
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron's, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

here they are: Some of The best inventions of 2018. 

Time Magazine asked its editors and correspondents to nominate inventions that are making the world smarter and more fun. The magazine whittled down the suggestions to 50 inventions it considers to be the very best. They include:

 

·         Off-the-rack bespoke clothing. If you have ever found yourself between two sizes or have had difficulty figuring out women's swimsuit sizing, you'll appreciate an innovation offered by a Japanese retailer. All you have to do is put on one of the company's "...stretchy black bodysuits...covered in white dots, which enables consumers to make a '3-D scan' of their bodies in the comfort of their own home, via a companion mobile app." Once you've completed the scan, you can order custom-fit clothing. Next up: custom shoes.

 

·         Blankets that ease anxiety. Science suggests there is a connection between insomnia and anxiety - and we all know how important sleep is. Weighted blankets offer gentle pressure that may help soothe the nervous system and improve sleep, according to Time. Retailers suggest consumers opt for blankets with a weigh equal to 10 percent of body weight. Be forewarned. The blankets come with a hefty price tag.

 

·         A gravity-defying toolbox. If you're looking for the perfect Valentine's gift for a friend or family member who uses tools in tough environments, this might be a good choice. A former F-16 aircraft mechanic designed a flexible toolbox that stays on curved surfaces without slipping.

 

·         A compass that points to friends and family. If you stress over the possibility of a child or pet getting lost at a crowded event or in an unfamiliar place, you may appreciate these paired compasses. They use GPS technology, in tandem with long-wave radio frequencies, to help people keep track of each other.

 

Just for fun, check out the other inventions at Time.com.

 

 

Weekly Focus - Think About It
 

"The fact is that my brain goes out to play. That's what creativity is - intelligence having fun."

--Joey Reiman, American businessman


Best regards, 
 
Jesse Hurst
 
Impel Wealth Management 
 
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Securities and advisory services offered through Cetera Advisors LLC, member FINRA/SIPC, a broker/dealer and a Registered Investment Adviser. Cetera is under separate ownership from any other named entity.
  
These views are those of Carson Group Coaching, and not the presenting Representative or the Representative's Broker/Dealer, and should not be construed as investment advice.

 

* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named broker/dealer.


 

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.


 

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* The Dow Jones Industrial Average (DJIA), commonly known as "The Dow," is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.

* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.

* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* You cannot invest directly in an index.

* Stock investing involves risk including loss of principal.

* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.

* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

* Asset allocation does not ensure a profit or protect against a loss.


 

* Consult your financial professional before making any investment decision.

 
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Sources:

http://time.com/collection/best-inventions-2018/5454282/grypmat/

http://time.com/collection/best-inventions-2018/5454439/lynq/

 
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Is there something we can help you with?  Please call me at 330.800.0182 or email me directly at jesse.hurst@impelwealth.com.

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