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T
his Week from Jesse Hurst
Jesse W. Hurst, II
CFP® CERTIFIED FINANCIAL PLANNER™
AIF
® ACCREDITED INVESTMENT FIDUCIARY
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At Impel Wealth Management, we take pride in being students of the business. This takes place in many forms for our team. For me, it means reading 500-600 pages of economic and investment data monthly, roughly half of which is highlighted and summarized for our monthly investment committee meetings.
It also means completing required continuing education hours for my CFP
®
, AIF
®
, State of Ohio Insurance and regulatory Broker/Dealer registrations and certifications. Altogether, these total approximately 30 or more hours per year.
It also means attending and/or speaking at a number of conferences each year. I spend 4-5 weeks a year attending these types of conferences with a goal of trying to make certain that we have the latest, most current information to help guide our clients in their decision-making process.
To that end, I was recently honored to be selected as one of 80 financial advisors invited to an American Funds due diligence meeting in Los Angeles. These were some of the top financial advisors from independent firms across the country. We spent two days meeting with portfolio managers and hearing their economists, market commentary strategists and portfolio construction experts. There was significant time for question and answer dialogue and interaction with these experts. Times like this are always valuable. It's great reading research reports and Morningstar analysis, however, you get additional information, insight, and nuance from being able to be face to face with these thought leaders.
We take the responsibility that our friends and clients have entrusted to us in managing their investments and financial planning goals very seriously. As we head into the new year, we wanted to remind you that serving you with excellence and distinction is of the highest importance to us as we are all "Moving Life Forward" together.
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Weekly Market Commentary
January 14, 2019
The Markets
People love rules of thumb.
Sometimes, mental shortcuts are helpful. Other times they are not. When it comes to investing, seasonal shortcuts are not uncommon. In fact, January boasts two:
The January Effect explains why U.S. smaller company stocks tend to outperform the market in January. The original theory held that tax-loss harvesting pushed stock prices lower in December, making shares more attractive to investors in January. An article published in
International Journal of Financial Research explained the effect could also owe something to the optimism that accompanies a new year, as well as year-end cash windfalls.
In his book,
A Random Walk Down Wall Street, Burton Malkiel described the January Effect this way, "...the effect is not dependable in each year. In other words, the January 'loose change' costs too much to pick up, and in some years it turns out to be a mirage."
The January Barometer suggests the performance of stocks during the first month of the year offers insight to the direction of stocks for the year as a whole.
Last week, the Standard & Poor's 500 Index (S&P 500) was up 2.5 percent. If the Index finishes this month higher, then the January Barometer suggests it should finish the year in positive territory.
Of course, you need look no further than 2018 to see the January Barometer is not completely accurate. In January 2018, the S&P 500 gained 5.6 percent, and it finished the year in negative territory.
According to
Fidelity, the theory is flawed because, while stocks move higher for the year a significant percentage of the time after gaining value in January, they also move higher for the year a significant percentage of the time after losing value in January.
This is why mental shortcuts are often poor investment guides.
There is one rule of thumb investors may want to consider adopting: A well-allocated and diversified portfolio that aligns with long-term financial aspirations to help meet goals along with periodic reviews with their financial professional.
Data as of 1/11/19
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1-Week
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Y-T-D
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1-Year
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3-Year
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5-Year
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10-Year
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Standard & Poor's 500 (Domestic Stocks)
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2.5%
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3.6%
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-6.2%
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10.5%
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7.4%
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11.6%
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Dow Jones Global ex-U.S.
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3.2
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3.8
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-15.7
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5.9
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-0.4
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4.7
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10-year Treasury Note (Yield Only)
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2.7
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NA
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2.5
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2.2
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2.8
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2.3
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Gold (per ounce)
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0.7
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0.6
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-2.6
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5.4
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0.7
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4.5
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Bloomberg Commodity Index
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1.7
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3.8
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-9.8
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1.9
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-8.6
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-3.5
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DJ Equity All REIT Total Return Index
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4.5
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4.1
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4.5
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6.6
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9.0
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14.8
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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.
Oh, What a Year!
Every year brings unexpected events. Here are a few remarkable stories you may have missed in 2018:
Abuzz in NYC
"...a menacing horde of honeybees descended on a hot dog vendor's umbrella, bringing Times Square to a standstill and drawing swarms of gawking tourists. After a brief flurry of excitement, the buzzing interlopers were apprehended by a police officer armed with a vacuum cleaner-like device that sucked them up. The bees were then whisked away to safety."
--Reuters, December 17, 2018
Mostly indivisible
"There's a new behemoth in the ongoing search for ever-larger prime numbers - and it's nearly 25 million digits long. A prime is a number that can be divided only by two whole numbers: itself and 1...
We would write the number out for you, but it would fill up thousands of pages, give or take..."
-NPR, December 21, 2018
Hoop dreams
"Basketball is apparently being embraced by North Korea as a fundamental part of its ideology...'Promoting basketball is not only a sports-related matter, but an important project that upholds the objectives of the [Workers] Party,' the North Korean paper reportedly stated. 'We must rush to elevate the sport to global levels.'"
--NPR, December 21, 2018
None for you
"A California court ruled...in a case involving a Celebes crested macaque who took a selfie using a nature photographer's camera...the court rejected a lawsuit filed on the monkey's behalf by People for the Ethical Treatment of Animals, which argued the primate was the legal owner of all photos he took. In a decision that likely left the plaintiffs crestfallen, the court ruled that monkeys cannot sue for copyright protection."
-Reuters, December 17, 2018
We hope 2019 brings you good health, good humor, and great happiness
Weekly Focus - Think About It
"As we navigate our lives, we normally allow ourselves to be guided by impressions and feelings, and the confidence we have in our intuitive beliefs and preferences is usually justified. But not always. We are often confident even when we are wrong, and an objective observer is more likely to detect our errors than we are."
--Daniel Kahneman, psychologist and author
Best regards,
Jesse Hurst
P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.
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 Group Coaching. Carson Group 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.
* 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.
* Consult your financial professional before making any investment decision.
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Sources:
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. Confidential: This email and any files transmitted with it are confidential and are intended solely for the use of the individual or entity to whom this email is addressed. If you are not one of the named recipient(s) or otherwise have reason to believe that you have received this message in error, please notify the sender and delete this message immediately from your computer. Any other use, retention, dissemination, forward, printing, or copying of this message is strictly prohibited.
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Is there something we can help you with? Please call me at 330.800.0182 or email me directly at [email protected].
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Impel Wealth Management
2006 4th Street, Cuyahoga Falls, OH 44221
P: 330.800.0182 TF: 844.422.5550 F: 234.312.0460
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