2019 Second Quarter Market Update- Barbeques and Bull Markets
Barbeques and Bull Markets
Summer is clearly here and for many of us that brings so many of our favorite things. Sunshine, warm weather, lakes, boats, pools, vacations, barbeques and in the case of second quarter markets; another quarter of overall positive market performance since the recent decline at the end of 2018.
Equity (stock) markets globally posted positive returns for the quarter and US equities specifically outperformed non-US developed and emerging markets. Value stocks outperformed growth stocks in emerging markets; however, small cap stocks were outperformed by large cap stocks in the US and globally. REIT indexes, which have been on the rise and one of the better performing asset classes, underperformed both US and international equities across the board. The following illustration lists performance for the asset classes for Q2.
As the Federal Reserve continues to alter their once aggressive course of raising interest rates, signs begin to further develop that a very real possibility of an interest rate cut as early as this month (July) may be looming.
The three factors that economists are keeping their eye on for the next several months are overall economic growth slowing, continued trade discussions and issues (namely China and Mexico) and the flat yield curve; which historically has been a reliable indicator for forecasting economic recessions.
In light of these headwinds, the U.S. economy has continued to grow and markets have continued to rebound from the turbulence of the Q4 2018. It seems markets have taken a Mark Carter approach to negative headlines: “There is no need to worry about things you cannot control!”
The chart above points to the imperative importance of proper diversification amongst all the asset classes and its effect on taking advantage when things are good and protecting when things turn. At FSG, we are confident and unwavering in our philosophy which in turn helps us navigate the markets for the ultimate success of our clients’ goals and objectives. It is our hope that our confidence will translate to our clients so they can focus on all the good things summer provides - like sunshine and barbeques.
This commentary on this website reflects the personal opinions, viewpoints and analyses of the Financial Strategies Group, Inc employees providing such comments, and should not be regarded as a description of advisory services provided by Financial Strategies Group, Inc or performance returns of any Financial Strategies Group, Inc Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Financial Strategies Group, Inc manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
Written by Ronnie Thompson