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Section Summary
- Decisions – Is it transitory or secular? The hardest decisions we make as investors are the ones we make when things don’t go perfectly.
- Market Notes – Returns across asset classes varied considerably during the second quarter as a strong U.S. dollar, fear of trade wars, weakness in emerging markets, political instability in Europe, strong U.S. corporate earnings growth and improved U.S. economic growth left markets uncertain about future direction.
- Equity & Fixed Income Comments – Within our foreign equity allocations we have spent considerable time reviewing our emerging market investments and remain confident in our position over the intermediate-term, but expect further volatility in the short run. In U.S. equity markets, we have begun to bias our research efforts to value opportunities, but are currently roughly style neutral. On the fixed income side we have less interest rate exposure than our benchmarks, remain underweight corporate credit and are using active management in areas of the market we are finding value. We continue to de-emphasize passive mutual funds and ETFs.
- Research Focus – Performance swings, emerging markets and the negative impact of behavioral biases.
- Client Focus – Less is More. A quick look at losing less or gaining more and which is more valuable to long-term wealth compounding.