Featured Resources and Insights for 2019

Market Snapshot from Ivan Hoffman

Greetings and Happy New Year! Last year at this time, I was writing about 2017, a year for the ages. You could call 2017 a unicorn of sorts. Not only was the S&P 500 up nearly 22%, but it was the first year in its history without a single down month. But 2018 provided a rude return to the norm. Perhaps you take issue with me characterizing last year as normal for the financial markets. Indeed, a loss in the S&P 500 is not ordinary; it’s up on average more than seven of every 10 years[1] .

So, what was normal about 2018? The return of volatility. The market experiences intra-year drops of 14% on average[2] , so the lack of volatility we experienced in 2017 was the anomaly. Again, 2018 was closer to norm.

What wasn’t normal last year? The continued absence of a bear market. Defined as a decline of 20% or more from a previous high, bear markets usually occur often — on average every 3.5 years.[3] We had a run of nearly 10 years without a bear market, and that’s not normal.

So, as you ponder whether what direction the market will take us this year, I share these three thoughts:

1. Expect timely and relevant input from our team, including an upcoming Power Session on the economy (More details below).

2. Know that market fundamentals appear much healthier now as compared to inflection points for the two most recent painful periods for the S&P 500.[4]

2019 Firm Update Inflection Points.JPG

3. It’s as important as ever to review your investment objectives and ensure that your portfolio’s allocation truly matches those objectives.

Featured Resources from Fi3

Below are three key resources that will help to guide our conversations in 2019. We look forward to discussing these topics with you.

[1] J.P. Morgan Asset Management - Guide to the Markets 1Q2019
[2] S&P 500 Performance - Source J.P. Morgan (above)
[3] BTN Research and Fidelity Investments
[4] J.P. Morgan Asset Management - Guide to the Markets 1Q2019