Capstone Wealth Advisors is pleased to announce the release of our Q3 2019 model allocations for your BP ESP 401(k). If you have been following our models this year you should be pretty pleased with the results so far. Based on current economic conditions both domestic and globally, we are reaffirming our Q2 2019 allocations and recommending they be maintained as is. This means if you’re using our model portfolios you don’t need to make any changes at this time. We would however encourage you to log into your BP ESP and check to make sure your allocations are actually following our models properly, sometimes a small rebalancing is needed to put the portfolio back in alignment with the models.
While the performance of equity markets has been strong this year many are wondering what the second half of 2019 might look like. If you read (or watch) the news, you are constantly barraged with negative information about tariffs, global economic concerns, political uncertainty, inverted bond rates, and the list goes on and on. The truth of the matter is most of it is just noise and to the average investor it can cause fear and anxiety about your investments. Economic fundamentals ultimately control equity prices not the news of the day and US economic fundamentals currently remain strong. International and Emerging Markets fundamentals are not nearly as strong and carry a much higher level of risk. Because of this we have avoided those asset classes for most of the year and will continue to do so until we can see economic stability from these broad reaching areas.
As we have stated numerous times recently, we believe the US economy is in the late stages of its current expansion phase. How long this will continue to last is unknown, but it will come to an end at some point. Recently we‘ve begun to see signs affirming that our economy is beginning to slow down but let’s make sure we are looking at this in the proper perspective. Often people confuse a “slowing economy” with negativity and worry but in reality it’s just the opposite. If you are on the freeway cruising along at 70mph and you let off the gas a bit it doesn’t mean you stopped the car nor does it mean you’re driving backwards, it simply means you are now moving along at 60mph instead of 70mph. You’re still moving forward, just not as quickly as you were before. This holds true for our economy as well; we were going 70 but now we’ve slowed down to 60 which is still a good pace to be moving along. Eventually we will slow down again to 50, 40, 30, and so on, but that could be down the road a ways.
Our economy continues to be strong and our investments should be structured to reflect that, for now.
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 877-739-6007
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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