U.S. & International Economics:
- We have global growth, albeit slow.
- Due to concerns that growth may go negative there is heightened volatility.
- Slow growth has produced low and even negative interest rates in some countries.
- Domestically, employment remains strong with unemployment under 5%.
- China’s slowing economy is showing signs of stabilization.
- Brexit may cause slower growth in Europe.
- Japan may have some contraction due to a stronger yen impacting exports.
- In general, inflation remains benign.
- European and Pacific/Asia stocks have been negatively impacted the most, as you would expect with the Brexit turmoil and Chinese recession fears.
- Utilities has been a big winner over the past twelve months, benefiting from ongoing low rates.
- Precious metals and oil stocks have rebounded dramatically over the quarter.
- Surprisingly, interest rates fell further in the second quarter and as a result fixed income assets performed well.
- Domestically, large and small cap stocks were modestly up, while international stocks were slightly down.
- Presidential Election
What Happens Next:
- Domestically, there is little indication of a recession in the near future.
- Increasing inflationary pressures may result in higher interest rates.
- Equities should enjoy continued appreciation with slow growth.
- Cash will likely continue to provide little-to-no yield.
- The election season could cause volatility in the markets.
As a final takeaway, it is important to remember that diversification is paramount in the process as you look toward preparing for a long and enjoyable retirement. When you diversify and maintain a long-term outlook with market performance, you approach investing with the right mindset to make healthy, strategic decisions.
Please let us know if you have any questions on the overall strategy and holdings in your personal portfolio. We are always happy to chat about your individual financial situation. As always, we greatly appreciate the confidence you have shown in our services. Thank you for your business!
Bijan Golkar, CFP
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