Page 14 - Leisure Living Magazine Spring 2019

Looking Into 2019
By Christopher McIntire, President, McIntire Retirement Services www.mcintireretirementservices.com
Happy 2019 to all!
I believe it is safe to say that most investors are happy to have 2018 behind them? We had a range of financial issues to deal with which caused some volatility
like we haven’t seen in nearly a decade.
After the performance of the stock market in 2017, not one month negative for the S&P 500, 2018 made up for it. Let’s look at what happened
in retrospect.
First, the Federal Reserve raised the
benchmark interest rate four times by .25%. The effect of this was certainly felt by bond investors as bond prices drop as interest rates rise. Bonds of all types, from foreign to domestic, government to high yield all had their moments of negative pricing. Conservative investors were even seeing losses on their statements from this type of behavior.
Second, interest increases and the future projections of growth in China made headlines
as well. Growth stocks were hurt here as growth stocks typically don’t pay dividends. An interest rate increase and forecasts of lower growth drove down these types of stocks significantly. Growth stocks depend upon their prices increasing for investors to win, so an interest rate increase, not to mention four, cuts directly into growth.
Third, 2018 had more negative asset classes like gold, oil, bonds of most types, and most stock classes which were all negative. Every once in awhile cash is the big winner and 2018 was one of those years. Thankfully 2019 has had a nice start to the stock market here in the US as the head of the Federal Reserve, Jerome Powell, has indicated a more cautious path forward on future interest increases.
The message here for most of we investors is that the markets do not always deliver the result we desire. Volatility can appear quickly, and losses can occur suddenly. There’s a saying that you don’t want all your eggs in one basket and that makes sense to many of us. 2018 was a reminder that many of those eggs can get damaged without breaking. Well-constructed diversified portfolios with a good safe money strategy to serve as a foundation and to provide some peace of mind would serve us all well!
I’m hoping the government can function normally and operate without shutdowns and trade agreements that are negotiated without further sanctions...maybe I’m hoping for too much!
Investment advisory services offered through Brookstone Capital Management, LLC. (BCM), a registered investment advisor. BCM and McIntire Retirement Services are independent of each other.
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14 |LeisureLiving Spring 2019
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