Bad News? Good News? Who Can Say?
With so much bad news out there, this quarter lets us focus on whether bad news can really be good news. Here are some scary headlines you’ve probably seen lately – bad news? Or good news?
• Interest rates rising – bad for bond prices & eventually bad for stock values? Or good for savers & indicative of a healthy growing economy?
• Inflation higher – input costs rising & profits lower? Wages rising so workers have more money to spend & sales increase also?
• Tariffs – a threat to economic growth? Or a negotiating tactic to eliminate trade barriers?
• Bearish sentiment high – pessimism drives prices down? Or prices down & time to buy?
• Robots – taking our jobs away? Or stuff I buy is cheaper & manufacturing stays in U.S.?
• Oil prices higher – my road trip costs more? But energy prices drive SP500 higher?
• US $ is down – my imported goods cost more? But U.S. sells more goods abroad?
• US $ is up – hurts U.S. exports? But my $ buys me more abroad?
• Stock market is down – bad for sellers? Good for buyers?
• Stock market begins 10th year of recovery – is it the end of this business cycle? Or healthy recovery extended due to lower rate of growth & interest rates rising slowly?
• U.S. government spending up & deficits increasing – requires more debt to be issued? But increased spending spurs economy in late stage?
• Corporate tax cuts – negatively impacts muni bond market as corporations buy fewer munis? Or good for the stock market as corporate after-tax earnings rise?
• BREXIT – triggered stock market panic in 2016? But is it galvanizing the EU in 2018?
• Flat or inverted yield curve – past signal of recession? Or now a broken barometer?
• Amazon Prime – limiting price competition? Or is easy shopping so worth the cost?
First-quarter 2018 was a bumpy ride of good news and bad news. The W&A Global Equity model declined (2.1%)* & the W&A Global Fixed Income model increased +0.1%.
Bad news? Good news? Who can say? What we can say for sure is that we will work with you to devise a financial plan that is comfortable for you and your family knowing that good news & bad news is not always clear.
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* The performance information provided is for informational purposes only. The results are unaudited & represent composite returns, net of fees. Additional information on composite returns presented can be obtained by contacting W&A. Past performance is not a guarantee of future results, and investments carry the risk of loss, including the risk of loss of invested capital.
