Same old same old

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We’re talking about old cars. It’s a funny thing about old cars . . . whether it’s an antique (like this one) or a brand new one bought some years back, they all need new parts every now and again. If you leave them to sit without replacing those worn out parts, you start seeing illuminated lights on your dashboard (at least you do on a modern car). The worst is when you ignore the signs and end up stranded on the side of the road – needing a tow truck – and expensive replacement parts.

Old car, new parts. Our financial plans and investment portfolios aren’t too different. What we planned years ago needs updating. Markets change; laws change; we change. If we don’t recognize the signs of change then we end up with outdated and possibly unfit goals, risk tolerance, and portfolios. By having a look at our financial plans and/or investment portfolios regularly to determine whether all the parts are still functioning is an effective strategy to ensure they still work best for us. What is regularly, you might ask? For most, we recommend that clients review their investment portfolios annually and their financial plans, at the very least, every other year.

Not all events follow the quarterly or annual system. The Institute of Supply Management (ISM) completes its report on a monthly basis. October started off with a slump with the first day showing that the ISM manufacturing index fell to 47.8% in September.  On the 3rd Of October, the ISM Non-Manufacturing Index for September came in at 52.6%. Although this was lower than the prior months’ reading, it did bring a bit of relief to a total view of the manufacturing index. The dividing line between expansion and contraction is 50.0% where >50.0% signals growth. The fears of a looming recession were recently downplayed by New York Fed President Williams (FOMC voter) in an interview as reported by Market Watch. In his talk at the University of California he indicated that the economic forecast was positive and favorable albeit a mixed picture. It appears that even the economists cannot agree on the state of U.S. economic growth. In a recent Bloomberg news report, economists debated whether the slowdown could become worse and flow into a recession. What does remain that is consistent: continued mixed economic data, international trade concerns, monetary policy and political outlooks persist to be cloudy.

And if we feel the U.S. economy is cloudy, it appears some international sectors are also overcast. Franklin Templeton’s Global Investment Outlook on September 30th discussed how the manufacturing-driven portion of the Growth Domestic Product (GDP) could be in recession while the service economy continues to be in a growth phase. There does appear to be a bright side; Russell Investments, in their latest Global Outlook, wrote that the Eurozone shows tentative indicators suggesting that the growth slowdown that began in early 2018 may be starting to bottom. We, here at White Raven Financial, are not market timers; we do not know where the top starts or when there is a bottom. But we do emphasize the need for rebalancing when necessary (within one’s risk tolerance).

The major markets ended the month of September in the green and recovered most if not all of their August slide. The blue-chip barometer (the Dow)* strolled upward most of the month and posted a 1.95% gain. The S&P 500 (SPY)* walked behind the DOW and ended with the month at 1.72%. The tech-rich Nasdaq Composite (COMPTR)* dragged its feet and finished behind both indices (but still in the green with a 0.46% gain. (*After linking, click on Quarterly & Monthly Total Returns, “Monthly” tab.) On Tuesday, September 24th, the Dow Jones Indices released the latest S&P CoreLogic Case-Shiller report; the report showed that home price increases have slowed to near a seven-year low. The 20-city composite Home Price Index in July reported a 2.0% annual gain; down 0.2% from the unrevised 2.2% posted the previous month. Before seasonal adjustments, month-over-month data had the month of July posting a 0.1% increase over the prior 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. Return for the DOW, S&P500 and the NASDAQ is the total return (price only) provided by Morning star Inc. as of 2019September30. 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.


Diane Jochimsen

Meet the Author:
Diane Jochimsen

Diane Jochimsen is the founder and lead financial advisor at White Raven Financial. Whether working on investment portfolios or with a financial plan, Diane always seeks to know more about clients’ values, aspirations, and end goals.