The economy has finally shifted into third gear and may even be gunning for fourth. As of June 27th, the Federal Reserve Bank of Atlanta estimates second quarter Gross Domestic Product (GDP) to come in at 4.5%; the highest in many years. Retail sales are strong, housing continues to be solid, and the Leading Economic Indicators (LEI) continues to signal growth ahead. This certainly seems to indicate little risk of recession for the balance of the year.
The markets, we need to remember, are influenced by more than just prospects of economic growth. Short-term fluctuations can be due to several factors, many of which are based on the emotions of investors. Returns over longer periods—say 10 years—are much more heavily influenced by valuations; by how cheap or expensive the market is at the starting point. As a reminder, despite the volatility and sideways action of the market so far this year, the US stock market remains extremely overvalued by most reasonable measures. Therefore, buy and hold investors should be prepared for very modest annualized returns over the next 10 years. Overseas markets appear closer to fair value, but their markets have weakened considerably as of late. We continue to believe that a more tactical approach to investing is wiser in these times. Remember, the markets can be unpredictable, your retirement planning doesn’t have to be. We are committed to providing you with the tools, services, and strategies that will empower you to pursue the retirement you deserve.
Founder Regi Armstrong attended an Advisory Leadership Forum at the Wharton School of Business at the University of Pennsylvania in June. He received academic updates from many thought leaders in the financial field, including renown professor Richard Marston. He also heard from the leadership of LPL Financial and networked with about 100 peers.
Finally, next time you come in the office, you may notice a décor refresh, thanks to Mrs. Armstrong.
Thanks as always for your trust. Our focus is your success… now, and into the future.