There was a whole lotta shakin’ going on in the markets for the last six months…but not much really happened. Equities rode higher in January, then the DOW dropped 1,175 points on one day in February. We shimmied through the Korean conflict, felt a breeze from another interest rate hike, and started shaking again recently with the foreign trade battles. The S&P has simply put on a sweater during the cold spots and gained 2.6% so far in 2018. The DOW has lost a fraction and the NASDAQ is warmer by 9.3% at halftime.
The best investment places to be in 2018 so far have been Consumer Discretionary +11.5%, Technology +10.9%, and Small Cap Growth +9.7%. Energy is +6.8% year-to-date with crude oil prices over $70 a barrel. Real Estate and Healthcare are up 1%…and Consumer Staples and Telecom are down 8% so far this year.
Here is a brief list of the halftime bests of 2018: Golden State Warriors (Basketball), Washington Capitals (Hockey), Ed Sheeran and Pink (Albums), Avengers-Infinity War and Black Panther (Movies-Box Office), The Band’s Visit (Theatre), Fire and Fury and A Wrinkle in Time (Best Selling Books), Prince Harry and Meghan Markle (Best Wedding). The lowest point of the year: Stoneman Douglas H.S. Shooting. The most moving moment of the year: Stoneman Douglas H.S. Students singing at the Tony Awards.
Pacific Sun Financial has continued our pattern of growth and efficiency for our clients…and for our firm. (It’s been 44 years in financial services since I started in a small Westwood office.) At halftime of 2018, we are on track to accomplish 17 of our 27 projects and goals for the year. Thank you to Margie, Rich, Esther, Mark, Howard, Nancy, John, Michael, Jim, Jack, Ann, Nadine and David for your introductions to our new clients in 2018.
One of the reasons we have 99% client retention is being responsive and keeping current with you. If you haven’t completed your semi-annual check-up for 2018, please contact Judy to schedule one. We prefer to be with you in person, but we can also catch up by phone, Skype, or Facetime. We need to know if your finances, circumstances, or risk levels have changed.
In 2017, the S&P 500 Index moved eight times at least 1% during a single day. This year, it’s moved 1% in a day almost forty times! The volatility may trigger tremors on Wall Street briefly, but interest rate hikes and corporate earnings are the real shakers in the long-run.
Plenty of optimism remains for stocks this year…even as we pass 100 months of the second-best bull market run in history. The economy is likely to continue growing. Corporate taxes should be declining. However, if companies start missing their profit numbers or slowing down their investments, then markets will slip. Billions of dollars are at stake with these latest foreign tariffs in play…plus inflation almost always causes interest rates to go higher.
Buying good investments and letting them grow has surely worked out very well for investors this decade. Today, a 2-year Treasury Bill yields 2.5%. You can also acquire a six-month, FDIC insured CD that will pay you 2%. When we see these percentages beginning to approach 4%, I believe the river of funds that have been flowing into stocks will start moving in a different direction.
Freedom should be high on everyone’s wish list…along with health, happiness, family and prosperity. Thanks to those who fought for, and to those who continue to protect, our right to be free.
Best wishes for a Happy Fourth and a great second half of the year.
Mitch Fisher