I hope everyone has been enjoying their Summer! At least the Twins are giving us something to cheer about. If you’ve been watching the news, you know there has been a lot of market volatility. I thought I would update you on what we see moving forward and how we have been positioning portfolios in light of the recent events.
As I am sure everyone is aware – the Trade War continues to drag on and as we suggested earlier, uncertainty is disrupting many companies spending and investing decisions. However, the U.S. consumer remains strong.
Unfortunately, outside the U.S., economic data continues to soften. China recently released some data that was less than impressive and German manufacturing and GDP reports actually pointed to a contraction. Amidst all of this, the Central Banks around the world are entering another round of lower interest rates and accommodative monetary policy. That should help to prolong the expansionary period, but rates are already negative, so it’s hard to know how much impact they will have. Clearly growth is slowing around the globe, especially outside the U.S. And while a recession isn’t on our doorstep the probability of it happening has increased.
So, what does that mean for portfolios? Over the course of the past year we have been taking profits. We are trying to smooth out the ride and reduce risk by holding a little more cash, increasing our focus on high-quality income producing assets, and we recently reduced our international exposure further. Having locked in yields on high quality bonds back when rates were higher may not have looked so good then, but it sure looks good now.
In closing, we remain cautious but recognize a Trade War resolution could have a very positive impact on global trade. We are in a good position to make additional adjustments as necessary. Hopefully we will see some upside surprises – like a Twins World Series victory! Thanks for your trust and confidence. Call us with questions or concerns.
Sincerely,
Robert J. Phillips, CFP®
President
Greater Midwest Financial Group, LLC.
3222 Rice Street
St. Paul, MN 55126-3047
Phone: (651) 490-9790 Fax: (651) 490-9788
robert.phillips@greater-midwest.com
www.greater-midwest.com
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Greater Midwest Financial Group, LLC is not affiliated with Kestra IS or Kestra AS.
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