We hope you are all having a great summer and have had the opportunity to enjoy a nice vacation or two. I’ve attached our quarterly advisory review letter and will chime in on market developments in the second quarter, but first I’d like to update you on some exciting new developments taking place with us in the coming months:
In September 2018, HD Vest Investment Services® will change its clearing platform from First Clearing, a division of Wells Fargo, to Fidelity Clearing & Custody Solutions® and its broker-dealer National Financial Services LLC (NFS), both Fidelity Investments® companies. This new platform will improve your experience with my practice by providing progressive technology and exciting new features. Over the next week or so you should begin receiving communications from H.D. Vest regarding this change. No action is required on your part in response to these communications. I’ll summarize the enhancements below:
- Access to an extensive range of products & services not previously available
- Updated, user-friendly online systems
- Enhanced mobile capabilities including mobile check/rollover deposits
- Consolidated view of all brokerage account holdings
- Industry leading client technology platform, including integrated applications
The change I’m most excited to roll out to you will be access to our new financial planning software, the industry leading eMoney Advisor®. This program will allow you as the client to log into your client portal and link all investment/asset accounts so that we can monitor your progress toward your wealth management goals in real time. It will also allow you to run your own “what if” scenarios in between our meetings to experiment with different possibilities when planning for your financial future. This software will be rolling out at the end of the 3rd quarter in late September, and Sam will be reaching out to all of our advisory clients to schedule a time at rollout so that we can help you set up your eMoney login and update your custom wealth management strategies.
On to a summary of market performance in the 2nd quarter:
- US Equities had a positive quarter (S&P 500 3.4%, Russell 2000 7.8%). International Equities underperformed (MXEA -2.3%, MXEF -8.7%)
- Driving growth in USA were impacts of tax cuts as well as strong GDP and jobs numbers
- Hurting international markets were the US getting the upper hand in the trade war with China, rising treasury rates, and strengthening of the US dollar vs. foreign currencies, especially those in emerging markets.
- Master Limited Partnerships, Oil, and Real Estate rally
- MLPs up 9.5% after taking a beating in Q1, supported by a major uptick in Oil prices. Crude Oil was up 14.2% mainly attributable to the recent agreement between OPEC and other producers to cap output, the Venezualan production crisis, and the President’s efforts to reduce Iranian crude oil sales revenue to zero to drive Iran toward negotiating a better nuclear deal.
- Dow Jones select RE up 10% in Q2 after a disappointing Q1- this can be attributed to REITs acting as a safe haven for investors in the midst of the administration’s efforts to renegotiate trade agreements with a host of countries. The REIT sector recovery as a whole appears to be strong and not isolated to specific property types.
- Bitcoin down 68.4% from its high in January
- During “crypto-mania” in 2017, many new tokens were released via ICO, 800 of such are now defunct
- No one really knows the intrinsic value of Bitcoin, and from where it stands it would appear the bubble has started to burst.
We are currently not recommending any changes to our model asset allocation portfolios, but do always recommend rebalancing regularly to stay in your target allocation. If you’d like for us to rebalance your portfolio, please give us a call. As always, if you’d like to discuss your portfolio or your financial situation as a whole, feel free to contact us to set up a meeting to review.