Apparently you can now edit the Manhattan skyline, reports the Wall Street Journal. That is if you are in the “In” crowd and they invite you to download their app which allows you to change the colors of the lights on a couple skyscraper towers. But some days, I don’t want to use my smart phone to do tech stuff. I want things to be a bit simpler, a bit more straightforward and tangible.
Summer is blooming all around us and when I came across some instructions on how to weave a wand out of lavender stems, I thought it seemed like just the right thing to do on a hot summer day. Sitting in the sunshine and using my hands to create rather than swipe a screen would be just the ticket. The instructions appeared simple enough until I had to follow them. Alas, leisurely wasn’t exactly how I would describe lavender weaving. After some trial and error, I came to the realization that if a stem broke halfway down the middle, I just needed to adjust and improvise rather than begin again (and again and again). I was working toward the end product I wanted, not perfection from the start.
It is not so different to our approach to financial planning here at White Raven Financial. When we update or create a financial plan with the input that clients provide us, we often run Monte Carlo simulations (because we have unpredictable variables in our futures, it models the probability of various other outcomes). All of your input and our modeling is done to look at the likelihood that your retirement funds and/or your cash flow will allow you to live comfortably through retirement. But more often than not, as we move through the process, following our “instructions”, a stem breaks. So we take what we have and adjust and improvise; we work together to get the end product clients want, knowing that none move through life with perfection.
Leaving aside the metaphors of wand weaving lore and moving into market lore . . . . at the beginning of this month the PCE Price index, which excludes food and energy, showed a 0.1% for July. A key takeaway assumption – we do not have inflation data to support a Fed interest rate raise within the next month. Even though inflation is not where the Fed would prefer it, current market performance has been strong with market valuations being questioned. Wealth Advisor recently reported on a CNBC interview with Robert Schiller in which he posited that underlying concerns around technological advancements may be partially responsible for the recent market increases. The market has rallied; a majority of the S&P500 components reporting quarterly results have beaten estimates – helping with current market valuation.
Outside US markets, European markets have been described as a rising tide. The EURO was 3.6% stronger in July and over 12% for the year. There is optimism that global growth and expansion will continue. Russell Investment’s 2017 Global Market Outlook Q3 reported on a possible Eurozone renaissance with current political risk diminishing. Near term growth appears to persist but with that also comes the uncertainty. Having a diversified portfolio may help offset some of the uncertainty.
The major U.S. stock market indices went for the green in July with the sunshine. The blue-chip barometer (the DowTR)* added 2.68%. The S&P 500 Index (SPXTR)* also liked the weather and grew 2.06%. The tech-rich Nasdaq Composite (COMPTR)* sprouted 3.43% overshooting its cohorts. On Tuesday, July 25, 2017, the S&P CoreLogic Case-Shiller report showed that the national home price index set an all-time high for the sixth consecutive month. The 20-city composite May Home Price Index reported a 5.7% year-over-year gain; down from the 5.8% gain posted in April. Before seasonal adjustments, month-over-month data also showed a gain with the month of May posting a 0.1% increase over the month of April 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 as of 2017July31. Diversification and asset allocation does not assure or guarantee better performance and cannot eliminate the risk of investment loss.
