Page 23 - AreaNewsletter 'Aug'19' issue
P. 23

Current Market Perspective
By Dan Maurer, CEO/Owner, DWM Family Wealth Ltd.
Onceagain,therecentmarketdrivingforcewasTheFederalReserveandinterestrates. Speci cally,FedChairmanJeromePowell’sbi-annual congressional testimony fueled hopes for a rate cut.
However, while the last 18 months have been anything but boring, if you had ignored the market over that time and only recently started paying attention, you may think that little has happened. U.S. stocks have made little headway over the past 18 months. Indexes are around the highs of therecentrangeandanotherpullbackispossibleandshouldbeexpected. TradeuncertaintyandthepotentialforalimitedFedresponsecould hurtstocksinthenearterm. Aneasingoftradetensionscouldkeeptherallyalive. Atcurrentvaluations,bothU.S.andinternationalstockshave historicallyproducedpositivelong-termannualizedreturns. Animportantfacttokeepinmindgivenheightenedshort-termriskstothestockmarket. International stocks could provide stronger returns in the decade ahead, re-earning their place in the portfolios of long-term investors.
We will continue to help our clients understand their long-term strategic equity allocation with a focus on diversi cation and using volatility to re- balance as needed. Our key portfolio review points:
4 A bias toward larger stocks. Large-caps historically have outperformed small-caps during the latter stages of an economic cycle. Large-cap
companies also tend to have lower debt ratios and may be nimbler in adjusting to the e ects of a trade war.
4 Limit exposure to riskier segments of the  xed income market. Lower credit quality bonds, such as high-yield and emerging-market bonds, tend to be more sensitive to economic/market ups and downs compared with Treasuries or investment-grade municipal and corporate bonds. The short-term investments provide liquidity and  exibility to reinvest if yields should move up, while the intermediate-term bonds provide a set level of income
in case yields move down.
4 An appropriate amount of international exposure. Long-term trend reversals, if they happen, could catch unprepared investors by surprise. Portfolios
shouldhaveanappropriatelevelofbroadinternationalexposure,includingemerginganddevelopedmarketsstocks. Thedegreetowhichthe world’s stock markets move in sync has fallen to the lowest level in 20 years, enhancing the potential risk-reducing bene ts of global diversi cation.
Happy Summer Castle Rock! As of mid-July, stock market indexes were at all-time highs with 6 record closes that week alone.
All  nancial planning services are provided free of charge to our retired or active Police, Fire Fighters, Teachers
and Military.
“Let’s meet for a cup ofco ee and a second opinion.”
Investment Advisory Services o ered through DWM Family Wealth Ltd. Investment Advisory Services o ered through DWM Family Wealth Ltd.
Aware Accessible Accountable
Architect Your Financial Future.
It is nice to understand your plan and the advice you receive.
Watch for Future Articles:
• Castle Rock Real Estate
• How to Find an Advisor •ProtectYourLegacy(BOSS)
Dan Maurer, CEO/Owner 303-814-2349
23 Castle Rock “AreaNewsletters • August 2019

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