Attention BP Employees,
Capstone Wealth Advisors is happy to announce the release of our Q2 2019 model allocations for your BP ESP 401(k) as well as the launch of refineryretirement.com, a new website designed as your go-to resource for your Employee Savings Plan and Pension accounts. This new site will be updated regularly with features designed to help you save for retirement.
As stated in last quarters 401(k) email we anticipated that fundamental economic factors would overtake the negative market swing occurring in late 2018. That analysis turned out to be fairly accurate with the Dow Jones Industrial Average gaining 11.15% in the first quarter of 2019 alone. Economic conditions in the US, while currently strong, have begun to show some signs of weakness and we could be seeing signs of a potential economic slowdown brewing later this year or possibly at some point in 2020. With that in mind, it is important you know what your investment risk tolerance is. For those of you with a long time until retirement, it may be appropriate to continue to taking a moderately high level of risk with your investments but if you are nearing retirement it may be appropriate for you to begin reducing that level of risk.
Our current expectation is US equity markets will remain in their upward trend but may be more susceptible to declines if additional negative news is released. Markets are unpredictable and can rise and drop dramatically without warning so it is important you have appropriately evaluated your risk tolerance and know what areas of your portfolio contain higher degrees of risk versus others.
Internationally we have seen continued weakness in both developed and emerging economies and expect that to remain in the immediate future, as a result we are eliminating exposure to these areas within all of our model allocations. It is important to note that while a US trade deal with China is likely to be reached in the near future (likely providing an immediate jump in Emerging Markets), our decision not to include exposures to the Emerging Markets option within our models was made with a broader view than that of just China. In our opinion the overall risks are elevated enough not to warrant exposure in these areas for now. Potential fallout from the UK’s “Brexit” is unpredictable and the myriad of geopolitical issues going on globally increase the overall risk to a level beyond what we would like to see. This doesn’t necessarily mean that both areas will undoubtedly drop in value, it simply means the risk/reward ratios are better in domestic markets than abroad and we favor stability versus higher risk.
If you would like to get some additional information or commentary about the current economic climate both domestic and abroad you can simply reply to this email and we can discuss those matters in further detail.
If you would like to speak with one of our planning specialists regarding structuring your 401(k) or determining when you are able to retire please let us know.
Tyler E Ryan
Capstone Wealth Advisors
Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
Stock investing involves risk, including loss of principal. International & Emerging Markets investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
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