It looks like 2018 will be the first year since 2008 where all the major indices are negative for the year. Since 2008 we had an upward trajectory in the market with no recession since the Great Recession of 2008-09. We are now showing signs of a late-cycle market which means rates are rising, inflation is rising, low unemployment, and solid corporate earnings. Since the stock market is a leading indicator of what will eventually happen in the economy, all signs are pointing to a recession in 2020, probably as soon as 2019.
I enclose a few of the indices and commodities and how they are performing year-to-date:
Toronto Stock Market (TSX): -8.3%
German Stock Market (DAX): -16.31%
Shanghai Index (China): -21.23%
U.S Broader Market (S&P): -1.5% (including the FAANG stocks)
London Stock Market (FTSE): -16.2%
Gold: -6.9%
Oil: -11.4%
Copper: -18.54%
I have a statistic for you. In the history of the stock market, of the 20 single largest point declines in one trading day, 10 of them happened under the Trump Administration.
Keep in mind that 30-35% of your portfolio is in bonds, and 10-15% is in cash. The rest is invested in the stock market but not entirely in the U.S. For this reason your portfolio is not as affected as the indices above. As a reminder every investment you own pays a monthly dividend which is reinvested. That means you are dollar cost averaging as the markets go down without investing a dime out of your pocket ultimately to reap the benefits when the market turns.
In terms of Security Financial news, we recently launched our Security Financial app. For those that have online access to My Portfolio, you can now utilize the app by downloading it from the iOS app store or the Google Play store. For those that do not have online access or have any questions on how to obtain online access, do not hesitate to contact our office. We have also revamped our website with an updated design for easier navigation and resources for all Security Financial clients.