Whether it’s hiring a new employee, climbing a frozen waterfall or buying investment property, sometimes taking a risk pays off and sometimes it doesn’t. But when taking a risk results in a positive outcome, it sure does feel wonderful. There are all kinds of risks that we could talk about, whether personal, physical or financial but any way you look at it, our brains are wired to be risk adverse.
At White Raven Financial, we look at your risk tolerance in regards to your goals, the markets and your investments. How comfortable are you with market fluctuations? How much does your financial security depend on more or less risk? What you answer to those questions and more depends both on who you are and what stage of life you are in. Major events in our lives can change our risk tolerance too.
Not all risk pays off, and we are sorry to announce that Stacy Gannon is no longer working at White Raven Financial and has taken a position to work with Washington State. During her time with us, she discovered that a future career as a financial advisor/financial planner was not a good fit for her. We wish her the best in her future endeavors; we will miss her smile.
If the up-coming election taking the major headlines isn’t making you smile, perhaps take notice of the upbeat economic data that was reported at the end of September – second-quarter gross domestic product (GDP) growth was upwardly revised to 1.4%. And speaking of the election, Heidi Richardson, head of investment strategy for U.S. iShares, opinions that if history is a guide, the results of the election will have little impact on longer-term U.S. or global equity returns. On the other hand, she expects some short-term volatility in the lead up to the election. The team of Sonders, Sorensen and Kleintop at Charles Schwab also gave a number of potential causes for possible market volatility in the short-term future. They supported their analysis citing the upcoming earnings rates expected by analysts. They felt those rates were a bit on the optimistic side which could leave the market vulnerable to an increase in volatility should the expectations be downgraded again. The team summarized their article by stating that they believed the bull market will live on regardless of any ups and downs in the fourth quarter.
On the international front, the potential for upside global surprises was a highlight in Blackrock’s Repositioning Portfolio Risk, by Global Chief Investment Strategist, Richard Turnill. He points to numerous signs that growth in markets around the world is set to change. Likewise, in What Lie’s Beneath Pimco’s Global Economic Advisor, Joachim Fels, and CIO Global Fixed Income, Andrew Balls, also predict a continuation of global economic expansion through 2107. Alongside ongoing growth they forecast a containment of global recession risks despite a lower trend growth than in previous cycles. For all of us, a reminder that what we do, or don’t do, with market forecasts depends on personal risk tolerances and time horizons.
Excitement was not the tune for the markets in September and a majority of the indices did not stray very far from August numbers. The blue-chip barometer (the DowTR)* slowed and back-stepped by -0.41% for the month. The S&P 500 Index (SPXTR)* tip-toed in with a 0.14% gain for the month. The tech-rich Nasdaq Composite (COMPTR)* was a bit sprightlier and managed a 1.94% gain for the month. The S&P Case-Shiller 20-city composite Home Price Index came in with a 5.0% year-over-year gain in July – down from 5.1% in June. Before seasonal adjustments, month-over-month data showed a small gain with the month of July posting a 0.6% increase over the month of June 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 NAV total return provided by Morning Star as of 2016September30