We’ve all had those stressful conversations and meetings in our lives. The ones where you walk away with a head so full of what was said and what wasn’t that your adrenaline is pumping and you have no idea how you’re going to get back to things as usual. Your mind keeps going around and around in an endless loop that you just can’t seem to move on from. At a conference I recently attended about capturing quantitative measurement of client risk tolerance, I joined a session on behavior analytics. The speaker talked about how to ease your stress after those hard discussions and high-impact meetings: don’t pretend you can just “let it go”. Instead, the speaker suggested, find a place that will re-energize you to continue your everyday work. The photo above is where I go; I love to garden. For me, sometimes making a tree into a dinosaur or a giraffe is so much fun; it allows me to I move on from what made me stressed in the first place.
Here at White Raven Financial, we also try to re-energize people when they are concerned about their long-term goals for a good retirement. When we build a plan, we try to provide options to allow our clients to ride out the downs in the market. We look at providing a long-term focus unless directed otherwise. Our goal is to smooth out the highs and the lows.
If you felt rattled by the markets’ movement in October, you probably were not alone. First Trust Portfolio’s in their brochure Staying The Course profiled the S&P500 for the last four decades and charted the average intra-year decline at approximately 14%. Alliance Bernstein, in Looking Beyond the Equity Market Sell-Off, agreed that while there was turbulence, it wasn’t extreme and long-term fundamentals still look solid into the future. They viewed the recent market volatility as driven by three chief concerns: 1) the rise in interest rates; 2) sell-off by market leadership; and 3) companies concerns on trade-related earnings. The team of Sonders, Sorensen and Kleintop at Charles Schwab, in their most recent Schwab Market Perspective, touched on the corporate earnings season which they considered decent. They also wrote about the severity of investor reaction and put forth that, from their perspective, it is too soon to tell if the bull market is over.
Moving away from US markets to the international markets, in Blackrock’s Global Weekly Commentary they pointed to a mix of global economic data. Some lows, some steady and some highs. Their view of the global economy is that it is transitioning to the later stages of the economic cycle which they see as still positive for growth despite concerns over trade conflicts. Alliance Global Investors also highlighted the effects of tariffs and the bouts of volatility in financial markets both here and abroad in their View From Global Strategist. One of their key points: setbacks are normal.
Turning our attention again back to the domestic market, stormy weather with the lashing of wind brought high waves and volatile days to the market’s major indices for the month of October. The blue-chip barometer (the Dow)* shed -5.07% for the month. The S&P 500 (SPY)* went further into the waves and dropped -6.94% for the month. The tech-rich Nasdaq Composite (COMPTR)* went into the surf and hit low tide at -9.2%. On Tuesday, October 30th, 2018, the Dow Jones Indices released the latest S&P CoreLogic Case-Shiller report showing that the national core home price index annual increases are beginning to come down. The 20-city composite Home Price Index reported a 5.5% year-over-year gain in August; down from the 5.9% posted the previous month. Before seasonal adjustments, month-over-month data had the month of August showed not changes from the prior month of July 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 return (price only) provided by Morning star Inc. as of 2018October31. Diversification and asset allocation do not assure or guarantee better performance and cannot eliminate the risk of investment loss.
*The Standard and Poor’s 500 is an unmanaged, capitalization weighted benchmark that tracks broad-based changes in the U.S. stock market. This index of 500 common stocks is comprised of 400 industrial, 20 transportation, 40 utility, and 40 financial companies representing major U.S. industry sectors. The index is calculated on a total return basis with dividends reinvested and is not available for direct investment.
*The Dow Jones Industrial Average covers 30 blue chip U.S. companies selected by the editors of the Wall Street Journal. The Dow represents about 25% of the NYSE market capitalization and less than 2% of NYSE issues.
*The NASDAQ is a market-value weighted index that measures all NASDAQ domestic and foreign common stocks.
Advisory services are offered through White Raven Financial, a Registered Investment Advisor in the state of Washington.
