With so much bad news out there, this quarter lets us focus on whether bad news can really be good news. Here are some scary headlines you’ve probably seen lately – bad news? Or good news?
• Interest rates rising – bad for bond prices & eventually bad for stock values? Or good for savers & indicative of a healthy growing economy?
• Inflation higher – input costs rising & profits lower? Wages rising so workers have more money to spend & sales increase also?
• Tariffs – a threat to economic growth? Or a negotiating tactic to eliminate trade barriers?
• Bearish sentiment high – pessimism drives prices down? Or prices down & time to buy?
• Robots – taking our jobs away? Or stuff I buy is cheaper & manufacturing stays in U.S.?
• Oil prices higher – my road trip costs more? But energy prices drive SP500 higher?
• US $ is down – my imported goods cost more? But U.S. sells more goods abroad?
• US $ is up – hurts U.S. exports? But my $ buys me more abroad?
• Stock market is down – bad for sellers? Good for buyers?
• Stock market begins 10th year of recovery – is it the end of this business cycle? Or healthy recovery extended due to lower rate of growth & interest rates rising slowly?
• U.S. government spending up & deficits increasing – requires more debt to be issued? But increased spending spurs economy in late stage?
• Corporate tax cuts – negatively impacts muni bond market as corporations buy fewer munis? Or good for the stock market as corporate after-tax earnings rise?
• BREXIT – triggered stock market panic in 2016? But is it galvanizing the EU in 2018?
• Flat or inverted yield curve – past signal of recession? Or now a broken barometer?
• Amazon Prime – limiting price competition? Or is easy shopping so worth the cost?
First-quarter 2018 was a bumpy ride of good news and bad news. The W&A Global Equity model declined (2.1%)* & the W&A Global Fixed Income model increased +0.1%.
Bad news? Good news? Who can say? What we can say for sure is that we will work with you to devise a financial plan that is comfortable for you and your family knowing that good news & bad news is not always clear.
* The performance information provided is for informational purposes only. The results are unaudited & represent composite returns, net of fees. Additional information on composite returns presented can be obtained by contacting W&A. Past performance is not a guarantee of future results, and investments carry the risk of loss, including the risk of loss of invested capital.