April 22, 2019
The Markets

And the answer is...
 
A Jeopardy! contestant captured the nation's attention last week by setting multiple records for the most money earned in a single episode. The Standard & Poor's 500 Index has been setting some records, too.
 
Michael Mackenzie of Financial Times explained:
 
"Less than four months through the year, the S&P 500 including the reinvestment of dividends has returned to record territory, along with the technology sector...Around the world, many benchmarks enjoy double-digit gains, led by China's CSI 300 index, having risen more than a third already during 2019."
 
Pessimism about economic growth prospects has kept institutional investors - including professional money managers whose performance is typically evaluated quarterly - on the sidelines. As a result, despite a "market-friendly shift by central banks and an expansion in China's credit growth that laid the ground for a rebound in activity," they have missed out on some significant gains.
 
Financial Times suggested when institutional investors begin moving money into stock markets, we could see the market 'melt up.' A melt up occurs when valuations surge for reasons that have little to do with improving fundamentals and a lot to do with investors rushing into a market because they fear missing out on gains.
 
Investors seeking safe havens could temper any gains from institutional investors entering the market. Jack Hough of Barron's suggested investors ignore safe havens, even though stock valuations remain high. He wrote, "...elevated prices don't rule out more gains. The S&P 500 was this expensive at the end of 2016. It has returned 36 percent since."
 
Some will take those words as encouragement, others as a warning. No matter which camp you are in, it may be a good time to have a carefully diversified portfolio.

Data as of 04/19/2019
1-Week
Y-T-D
1-Year
3-Year
5-Year
10-Year
Standard & Poor's 500 (Domestic Stocks)
-0.1%
15.9%
7.3%
11.5%
9.2%
13.3%
Dow Jones Global ex-U.S.
0.3
12.2
-6.9
5.6
0.9
6.0
10-year Treasury Note (Yield Only)
2.6
NA
2.9
1.8
2.7
2.8
Gold (per ounce)
-1.4
-0.5
-5.6
1.1
-0.2
3.8
Bloomberg Commodity Index
-1.2
6.5
-9.7
0.4
-9.8
-2.9
DJ Equity All REIT Total Return Index
-3.0
15.2
18.0
7.1
9.2
17.0
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Social Security News Release

The 2019 Social Security Trustee report was released today.  Here are some of the highlights:
  • The assets increased by $3 billion dollars in 2018.
  • Benefits paid out in 2018 - $989 billion
  • Social Security is projecting a shortfall beginning in 2020.
  • 2035 is the projected year for the fund to be depleted if Congress does not act. This is one year later than last year report.
  • There will be sufficient income from individuals paying into Social Security to cover 80% of the scheduled benefits.
It is no surprise that Social Security is in on a downward slope and changes need to be made.
 
"The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually and give workers and beneficiaries time to adjust to them," said Nancy A. Berryhill, Acting Commissioner of Social Security.
 
How and if they will is the question.


Second Harvest Heartland

We still have room if you would like to volunteer with us at Second Harvest Heartland in Brooklyn Park on Tuesday, May 7th from 9:00 to 11:30 am. We enjoy working with clients to help sort and pack food for local food shelves. To register click on the link below or call our office at (763)542-8884.

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Bruce Kuehl | 763.542.8884 | bkuehl@lifestagewealth.com