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Monthly Market Memo

July Monthly Market Memo

Monthly Market Updates for July 2018

Please find this month’s market updates below. This list is intentionally brief and uses ETFs that are readily available to all investors to represent the major markets. In the second section are five simple portfolio mixes; three of which are described by low-cost Vanguard mutual funds, while the other two are low-cost ETFs. These can be used as a guide against which to compare your portfolio mix. We hope these few, but important data points, are of value to you.

– the AdvicePeriod Team

Major Market Index Returns – Period Ending 7/31/18 (Annualized)

Selections include ETFs generally available to consumers. Returns are net of management fees but do not include trading and Advisory fees. Return source: Morningstar. AP disclosure.

Sample Portfolio Mix Returns (Annualized)

Global portfolio mixes are Stocks/Bonds and are represented by ACWI/AGG** or Vanguard funds where available. Funds are net of all management fees but do not include trading and Advisory fees. Return source: Morningstar. AP disclosure.

Things to Consider

Global equity markets were strong in July with the US stock market having its best month since January; up 3.7%, while international and emerging markets also posted healthy gains of 2.5% and 2.2%, respectively. The US economy continues to thrive, with second-quarter GDP (gross domestic product) up over 4.1%; the highest since the 3rd quarter of 2014. Consumer confidence remains high.

Trade tariff threats between the US and China, Mexico, Canada and the EU captured most financial headlines during the month. The agreement between the US and EU was a good sign for markets and tempered fears of a trade war (for now).

Market All-Time Highs?

Who would have thought that US stocks would be back at or near all-time highs only 6 months after the sharp declines in the first few months of 2018? Once again, the markets prove resilient, which serves as a reminder to investors that while headlines can make for good party banter, markets remain unpredictable over the shorter term. Directionally, capitalism continues to prove that over longer time horizons, stocks should outperform bonds and bonds should outperform cash. So what should one make of any talk of a looming market decline? Not much except to remember that market all-time highs often lead to….more market all-time highs. Stay the course, stay disciplined, and do not get lost in all the headlines, at least not when it comes to your investment portfolio.

Does Past Performance Matter?  Find out here.


What You Pay For: The Percentage of Active Managers That Underperform Their Benchmarks

Trailing 10 Years Numbers As of December 31, 2017 — S&P SPIVA Scorecard

The SPIVA Scorecard is a robust, widely-referenced research piece conducted and published by S&P DJI that compares actively managed funds against their appropriate benchmarks on a semiannual basis.

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