In our neighborhood and beyond, we see the evidence of gardens being planted this time of year. Garden gloves tossed aside in someone’s haste to move on to the next patch, neat rows of mounded soil where beans and young tomato plants have been started, and lively spots of color popped in the ground in anticipation of more to come. Here at the Stump Farm, as I put my purchased flower starts in their respective pots, I think of a meeting I attended during the month of April at the local Arlington Garden Club. The presentation about Hands On Craft began: “First you fill the pot three-fourths full of dirt”. Immediately a member of the audience chuckled and commented “when planting, gardeners don’t use dirt, we use soil. Soil contains nutrients; dirt is just that, dirt”. Not every gardener is pedantic, but we all rely on the difference that nutrients bring to change dirt into soil.
When we construct portfolios for clients, we try to provide the “nutrients” of a good background for the portfolio. We often remind our clients why we diversify and why we stay in tune to clients’ risk tolerance. For example, whether an investor has a low or high personal risk tolerance, the goals of the investor might require a different risk capacity. An investment might be made as simple as dirt; we aim for our clients’ portfolios to have the same qualities and potential to nourish as soil does seeds. White Raven Financial cannot guarantee the results of the portfolios we construct, but we focus on the plan, the goals and invest diversely within the parameters that are provided.
And speaking about things growing, you may have noticed that the Russell 2000 hit new heights in the month of May. And our current economic expansion began its 107th month in May; this ranks it as the second-longest ever. The longest expansion lasted 120 months (3/91-3/01). Alliance Bernstein management team addressed the sustainability of the U.S. current eight year expansion stating that stewardship and social equity are often viewed as important to a country’s long-term economic health. Their synopsis argued that regardless of our political affiliation each of us should have a strong incentive to make our planet more sustainable.
Looking across the pond, Blackrock’s Global Chief Investment Officer Richard Turnhill sees economic expansion in Europe and a steady earnings outlook. As many of you noticed, the last week of May saw heightened uncertainty caused by Italy’s unknown political future. Charles Schwab Insights indicated that most Italians do not wish to leave the Euro and higher bond yields may serve as a warning and act as a constraint. Lord Abbett’s Market View charted why they thought international equities are poised to catch up to their U.S. counterparts. They also charted the statistic on domestic and international equities having each outperformed the other exactly half of the time in the last 18 calendar years.
The month of May rolled up and down with a final finish on the up. The blue-chip barometer (the DowTR)* fast-pace-walked to the finish with a positive 1.4%. The S&P 500 (SPYTR)* jogged past its brother and finished with a positive 2.4% for the month. The tech-rich Nasdaq Composite (COMPTR)* decided to run the course and completed the month in first place with a 5.5% gain. On Tuesday, May 29, 2018, the Dow Jones Indices released the latest S&P CoreLogic Case-Shiller report showing that the national core home price index momentum has not abated. The 20-city composite March Home Price Index reported a 6.8% year-over-year gain; the same as the previous month’s. Before seasonal adjustments, month-over-month data had the month of March posting a 1.0% gain over the prior month of February for the 20-city composite index.
Regards and Thank you,
The Team at White Raven Financial
*Indexes are unmanaged and do not reflect service fees, commissions, or taxes. You cannot invest directly in an index. Past performance is not necessarily indicative of future results. Returns for the DOW, S&P500 and the NASDAQ is the total return (price only) provided by Morning star Inc. as of 2018May31. Diversification and asset allocation does not assure or guarantee better performance and cannot eliminate the risk of investment loss.
Advisory services are offered through White Raven Financial, a Registered Investment Advisor in the state of Washington.
