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  • Writer's pictureMilo F. Hanke, CFP

2019 Q2 Quarterly Newsletter & Performance Report2019 Q2 Quarterly Newsletter & Performance Report

This past quarter has registered undramatic performance in the financial markets. 

In a nutshell, the media has hyper-focused on the Federal Reserve’s anticipated change of interest rates, which were lowered a quarter-point this month.  In its oblique Fed language, interest rates were lowered because economic growth has significantly weakened, in part, due to trade tensions.  At the same time, inflation risk remains at bay even with the federal deficit running one trillion dollars per year.

Companies are feeling the impact of tariffs.   While trade tensions persist with China, corporations are delaying capital investment as well as adding more workers.  As always, companies clam up when their markets become unpredictable, and financial markets echo this. 

Lowering interest rates softens the dollar against other currencies and thus makes it easier for foreigners to purchase domestic goods and services.  On the other hand, the relative disadvantage of a stronger dollar reduces American exports – Caterpillar tractors and such become more expensive for foreign consumers.  

This positive business cycle continues its historic run but with increased volatility.  Some pundits see a 30 percent chance of a recession within the next year or two.  What ends a bull market is either interest rates rising too far or an outside shock. We continue as long-term investors who utilize asset allocation as a risk reduction strategy.

There are no major changes to our portfolios at this time.  However, we do continue to monitor the performance of individual portfolios including periodic reviews and updates with clients.    We have prepared the enclosed quarterly report, detailing the performance of your personal portfolio, net of advisory fees that are detailed on a separate sheet. 

As always, we welcome your questions regarding the management of your investments or updates to your financial plan.

"What’s the difference between Schwab Alliance online access and Hanke & Co. Wealth Management’s Client Portal?

”Charles Schwab & Co. is the custodian of your investment assets.  As an independent third-party, Schwab Alliance online access provides direct, unalterable information regarding your holdings.  Information like real-time portfolio balance, trading activity, monthly statements, and tax documents are available at Schwab Alliance.

Our firm’s Client Portal provides you with enhanced reports produced by Hanke & Co. Wealth Management i.e. Quarterly Portfolio Performance Reports and Quarterly Advisory Fee Notifications.  Our reports provide additional insight into the relative performance of your portfolio versus a pre-determined benchmark index such as the Standard & Poor’s 500 (S&P 500).

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