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Weekly Market Commentary (March 19, 2019)

Weekly Market Commentary (March 19, 2019)
 
The Markets
 

Stock and bond markets rallied.

 

Last week, major U.S. stock indices finished higher for the 10th time in 12 weeks. Bond markets moved higher, too, with the yield on 10-year Treasuries dropping just below 2.6 percent, reported Randall Forsyth of Barron's. Yields on 10-year Treasuries haven't been this low since January 2018.

 

The simultaneous rallies are curious because improving share prices are often an indication of a strong or strengthening economy. Improving bond prices tend to be a sign of weakening economic growth, reported Michael Santoli of CNBC.

 

Why are U.S. stock and bond markets telling different stories?

 

It may have something to do with investor uncertainty. A lot of important issues remain unsettled. The British government appears incapable of resolving Brexit issues, the United States and China have not yet reached a trade agreement, and recent economic reports have caused investors to take a hard look at the U.S. economy.

 

Barron's pointed out investors appear to be hedging their bets by favoring in utilities and other stocks that have bond-like characteristics and participate in the stock market's gains. An investment strategist cited by Barron's explained:

 

"The strength in utilities reflects the attitude of investors who 'don't really buy the rally'...While they're skittish, they still want to participate in the stock market rally but opt for its most conservative sector."

 

We've seen this before with stocks and bonds, according to a financial strategist cited by Patti Domm of CNBC. "It's a little bit of a funky correlation. We've had both things rallying, which is strange. This is what happened in 2017, when all asset classes did well. In 2018, nothing did well...I would suspect it goes away soon."

 

Times like these illustrate the importance of having a well-diversified portfolio.

 


Data as of 3/15/19

1-Week

Y-T-D

1-Year

3-Year

5-Year

10-Year

Standard & Poor's 500 (Domestic Stocks)

2.9%

13.0%

2.7%

11.9%

8.7%

14.1%

Dow Jones Global ex-U.S.

2.6

9.9

-8.7

6.4

1.0

7.1

10-year Treasury Note (Yield Only)

2.6

NA

2.9

2.0

2.7

3.0

Gold (per ounce)

0.5

1.7

0.7

1.9

-1.1

3.6

Bloomberg Commodity Index

1.4

6.3

-6.6

1.2

-9.5

-2.7

DJ Equity All REIT Total Return Index

2.3

14.7

18.0

8.6

9.7

19.1

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

 

GEN XERS AND MILLENNIALS: WHAT ARE YOUR PRIORITIES? The 2018 Insights on Wealth and Worth survey provided some startling information about the priorities of high net worth (HNW) investors. More than one-half (54 percent) indicated long-term capital appreciation was a higher priority than income generation. The other 46 percent were looking for steady income.

 

Let's look at the percentages by age group:

 

·         Millennials: 56 percent capital appreciation / 44 percent steady income

·         Gen X: 56 percent capital appreciation / 44 percent steady income

·         Baby Boomers: 56 percent capital appreciation / 44 percent steady income

·         Silent Generation: 46 percent capital appreciation / 54 percent steady income

 

Millennials (ages 21 to 37), Gen Xers (ages 38 to 53), and Baby Boomers (ages 54 to 72) prioritize steady long-term income to the same extent.

 

Older investors, who are near or are in retirement, tend to emphasize steady long-term income because they need to maintain their standard of living in retirement. However, one of the advantages of youth is these investors have the time and flexibility to take on higher levels of risk and recover from any market downturns. In other words, younger investors prioritize capital appreciation (i.e., growth) while older investors prioritize income.

 

It's important for younger investors to consider their life goals and how their finances may support the pursuit of those goals.

 

Weekly Focus - Think About It

 

"There are risks and costs to action. But they are far less than the long range risks of comfortable inaction."

--John F. Kennedy, 35th President of the United States

 

Best regards,

 
Lee Barczak
President
 
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate. *Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. * The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index. * The Standard & Poor's 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. * The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce. * The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. * Past performance does not guarantee future results. Investing involves risk, including loss of principal. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision.
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Weekly Market Commentary

Markets were rattled last week.

 

The market hates surprises, especially when the surprise comes from a central bank. Last week, the European Central Bank (ECB) unexpectedly reversed course and took a more accommodative stance on monetary policy in an effort to encourage stronger European economic growth. Tom Fairless of Barron’s explained:

 

“Officials are seeking to shore up an economy that has been rattled by shocks ranging from a slowdown in China to mass protests in France and bottlenecks in Germany’s crucial auto industry. They are threading a careful path between providing sufficient support for the region’s softening economy while avoiding any appearance of panic, which could ricochet through financial markets.”

 

The Eurozone isn’t the only region feeling the pinch of weaker economic growth. China’s exports were down more than 20 percent in February, reported Investing.com. Analysts had expected a decline of about 5 percent. Concerns about the health of China’s economy have been growing since the publication of ‘A Forensic Examination of China’s National Accounts’ by the Brookings Institute. The authors concluded:

 

“First, nominal GDP [gross domestic product*] growth after 2008 and particularly after 2013 is lower than suggested by the official statistics. Second, the savings rate has declined by 10 percentage points between 2008 and 2016. The official statistics suggest the savings rate only declined by 3 percentage points between these two years. Third, our statistics suggest that the investment rate has [fallen] by about 3 percent of GDP between 2008 and 2016. Official statistics suggest that the investment rate has increased over this period.”

 

*Gross domestic product is the monetary measure of the market value of all goods and services produced annually in the country.

 

As if that weren’t enough, the U.S. jobs report for February reported far fewer jobs had been created than was expected.

 

It will come as little surprise to learn that major U.S. stock indices moved lower last week.

 


Data as of 3/8/19

1-Week

Y-T-D

1-Year

3-Year

5-Year

10-Year

Standard & Poor's 500 (Domestic Stocks)

-2.2%

9.4%

0.2%

11.5%

7.9%

15.0%

Dow Jones Global ex-U.S.

-1.8

7.1

-10.6

6.1

0.1

7.9

10-year Treasury Note (Yield Only)

2.6

NA

2.9

1.8

2.8

2.9

Gold (per ounce)

-1.2

1.2

-1.8

0.8

-0.7

3.5

Bloomberg Commodity Index

-0.6

4.9

-8.1

0.9

-9.9

-2.6

DJ Equity All REIT Total Return Index

0.2

12.1

16.6

8.7

9.4

19.9

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

 

how do you reconcile the beige book and the labor report? If you have never heard of the Beige Book, it’s a scintillating tale of business and economics published by the Federal Reserve.

 

Okay, maybe it’s not scintillating, but it has some pretty interesting stories.

 

The March 2019 installation – it’s published eight times a year – includes real world stories about businesses and workers gathered by Federal Reserve Banks across the nation. For instance, the St. Louis Federal Reserve reported their contacts in higher education reported falling enrollment. It seems more potential college and post-graduate students have been choosing to go straight into the workforce.

 

The Beige Book reported, across the nation, “Labor markets remained tight for all skill levels, including notable worker shortages for positions relating to information technology, manufacturing, trucking, restaurants, and construction. Contacts reported labor shortages were restricting employment growth in some areas.”

 

Of course, labor is easier to come by in some districts than in others. The Boston Federal Reserve reported contacts in its district have a hard time finding skilled workers in fields like information technology, but retail businesses are having no trouble filling jobs.

 

Wages have been going up in the Cleveland Federal Reserve’s district. “Bankers raised wages both for low-wage and for high-wage positions, citing competitive labor markets. A couple of construction companies granted large retention-focused merit increases to office staff, but other companies mentioned that they tended to grant raises during busier seasons.”

 

Hiring was up in the San Francisco Federal Reserve’s territory. “Employment at a large San Francisco software and consulting company grew notably as demand for its services increased. A cattle ranching company in Arizona also increased employment to meet growing demand. In the Mountain West, a regional bank noted that its hiring was limited only by a shortage of qualified labor.”

 

In light of last week’s incredibly weak jobs report, the Beige Book’s findings seem odd that companies are having trouble hiring enough workers and are raising wages to attract them. How can so few jobs have been created when there is high demand for labor? (Economists’ rule of thumb is 100,000 jobs are needed to accommodate people entering the labor force each month, according to MarketWatch.)

 

An economist cited by MarketWatch commented, “One poor report should not set off alarm bells, but given that the labor market is the linchpin for the entire economy, it does add to existing concerns and raises the stakes for next month’s report.”

 

Weekly Focus – Think About It

 

“Hard work spotlights the character of people: some turn up their sleeves, some turn up their noses, and some don't turn up at all.”

--Sam Ewing, Professional baseball player

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Weekly Market Commentary (March 5, 2019)

Weekly Market Commentary (March 5, 2019)
 
The Markets
 
Is it a soft landing?
 
Economists use aviation metaphors to describe the results of central banks' efforts to manage rapidly growing economies. If the Federal Reserve lifts rates enough to prevent the economy from overheating without jolting it into recession, then it has engineered a soft landing, according to Investopedia. (Rate increases that drop a country into recession are hard landings.)
 
Ben Levisohn of Barron's thinks recent Fed actions may have produced the second soft landing in the history of the United States:
 
"...the Federal Reserve might have engineered a soft landing for the U.S. economy...When Chairman Jerome Powell abruptly decided that he would hold off on further rate hikes, the market responded as if a recession was no longer in the offing. And it probably isn't...There are also signs that the Fed, simply by taking a breather, has eased monetary conditions. The evidence: The yield curve is steepening. The difference between 30-year and two-year Treasury yields - the spread most correlated to money supply - has risen to about 0.6 percentage point, the highest since June..."
 
Not everyone agrees.
 
Last week, Economist Robert Shiller told Bloomberg, "The economy has been growing pretty smoothly...There are some signs there might be things amiss. The housing market is soaring and the stock market is high. It's been a long time that we've been in this recovery period and it wouldn't surprise me at all if there was a recession."
 
The Standard & Poor's 500 Index and Nasdaq Composite delivered slight gains last week, while the Dow Jones Industrial Average was flat.

Data as of 3/1/19
1-Week
Y-T-D
1-Year
3-Year
5-Year
10-Year
Standard & Poor's 500 (Domestic Stocks)
0.4%
11.8%
4.7%
12.3%
8.7%
14.9%
Dow Jones Global ex-U.S.
0.1
9.1
-8.0
7.3
0.7
7.8
10-year Treasury Note (Yield Only)
2.8
NA
2.8
1.8
2.6
2.9
Gold (per ounce)
-1.5
2.4
0.3
2.0
0.5
3.4
Bloomberg Commodity Index
-1.4
5.5
-8.2
2.1
-9.8
-2.3
DJ Equity All REIT Total Return Index
-1.6
11.9
19.6
8.7
9.1
19.6
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
 
HERE'S A BLAST FROM THE PAST. Depending on your age, the 1980s may be a nostalgic chapter in your life or the wellspring of amusing photos of your Miami-Vice clad, lace-gloved parents. The 80s are known for more than MTV, yuppies, sci-fi movies, and cell phones the size of shoeboxes, though. The decade marked the start of a new era in geopolitics as the Cold War ended and the Berlin Wall was dismantled.
 
The 1980s also brought a wealth of innovative new products that disrupted markets and changed the way people perform everyday tasks. Entrepreneur Magazine recently identified some of the decade's notable inventions, including:
 
  • The First Artificial Human Heart. Dr. Robert Jarvik's invention was used as a temporary solution for many people who were waiting for a human heart to become available for transplant.
  • Compact Disc (CD) Players. The first compact disc ever pressed was ABBA's 'The Visitors' reported Time Magazine. Not many people listened to CDs early on because of the cost. However, CDs eventually disrupted the market for vinyl records.
  • DNA Fingerprinting. This discovery enabled a person to be identified from just a few hair, skin, or blood cells which revolutionized forensic investigation.
  • Personal Computers and Software. At the start of the decade, technology visionaries Bill Gates and Steve Jobs - still in their twenties - were figuring out how to make computing accessible. Personal computers became more prevalent, along with floppy disks and CD-ROMs.
 
While the fashions have become obsolete, along with camcorders and CD players, many of the decade's inventions have proven more durable - and some have completely changed the way people interact with the world.
 
Which of this decade's inventions do you think could have a similar impact?
 
Weekly Focus - Think About It
 
"Don't let anyone rob you of your imagination, your creativity, or your curiosity. It's your place in the world; it's your life. Go on and do all you can with it, and make it the life you want to live."
--Mae Jemison, American engineer, physician, and NASA astronaut
 
Best regards,
Lee Barczak
President
 
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate. *Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. * The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index. * The Standard & Poor's 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. * The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce. * The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. * Past performance does not guarantee future results. Investing involves risk, including loss of principal. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision.
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Weekly Market Commentary

The Market

 

Investors were pleased with the Federal Reserve’s (Fed) new approach to its balance sheet.

 

The Fed delivered its semi-annual Monetary Policy Report to Congress last week. The report recapped the events of late 2018 and reiterated the Fed’s intention to “…be patient as it determines what future adjustments to the federal funds rate may be appropriate to support the Committee's congressionally mandated objectives of maximum employment and price stability.”

 

In other words, rate hikes are on hold for now.

 

The Fed also addressed issues related to its balance sheet, which grew from $900 billion at the end of 2006 – about 6 percent of the United States’ gross domestic product (GDP) – to almost $4.5 trillion at the end of 2014 – about 25 percent of U.S. GDP. (GDP is the value of all goods and services produced in the United States in a given period.)

 

The balance sheet more than quadrupled during the past decade because the Fed began buying Treasuries and mortgage-backed securities, a policy called quantitative easing, in an effort to restore the U.S. economy to health, according to The Hutchins Center of the Brookings Institute.

 

Friday’s report indicated the Fed will not shrink its balance sheet to pre-crisis levels, reported Erwida Maulia for Financial Times. Markets responded positively to the news:

 

“U.S. stocks and Treasuries were comfortably higher at midday on Friday as the Federal Reserve signaled it will hold a much larger balance sheet in the long term than it did before the financial crisis, helping ease investor concerns about tightening financial conditions.”

 

Investors also remained optimistic about trade talks between the United States and China. Major U.S. stock indices finished the week higher.

 


Data as of 2/22/19

1-Week

Y-T-D

1-Year

3-Year

5-Year

10-Year

Standard & Poor's 500 (Domestic Stocks)

0.6%

11.4%

3.3%

12.8%

8.6%

14.2%

Dow Jones Global ex-U.S.

1.7

9.1

-9.8

7.7

0.4

7.2

10-year Treasury Note (Yield Only)

2.7

NA

2.9

1.8

2.8

2.8

Gold (per ounce)

1.1

3.9

0.2

3.2

0.1

3.1

Bloomberg Commodity Index

1.4

7.0

-7.4

2.6

-9.3

-2.2

DJ Equity All REIT Total Return Index

0.0

13.7

20.5

10.7

9.7

18.8

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

 

salt water has an economic IMPACT due tosea levels rising at a more rapid rate during the past three decades, according to the U.S. Global Change Research Program’s Climate Science Special Report. Since 1900, sea levels have risen between 7 and 8 inches. Since 1993, they’re up 3 inches.

 

As levels continue to rise, people and companies around the world are likely to be affected. Morgan Stanley reported, “Many coastal cities around the world that look attractive to real assets investors – for example, Miami, New York, Boston, Osaka, Guangzhou, and Mumbai – are particularly vulnerable to flooding and other weather-related problems. And, infrastructure assets favored by investors, like airports, cell towers, and oil and natural gas pipelines, are often located in places prone to storms and extreme heat…Insurance will continue to be an important safeguard, but a limited one.”

 

Protecting property and improving infrastructure is likely to change demand for specific goods and services. Sarah Green Carmichael of Barron’s reported, “As we rush to protect basements and beach houses, companies in the home-improvement retail sector should benefit…So should companies that make products to cope with flooding, such as commercial-grade water pumps…Upgrades to infrastructure also mean good news for the construction sector…”

 

The textile industry – think fabrics and clothing – may also be affected since major exporters like Bangladesh, Indonesia, and the Philippines, which supply 10 percent of the textiles and clothing imported by the United States, are vulnerable to coastal flooding.

 

Sea level is a macroeconomic issue. It has the potential to affect output and income across the global economy. Investment managers who take a top-down approach to investing consider the ways in which macroeconomic factors, like changing sea levels, could affect the market as a whole, as well as the share prices of specific companies. Bottom-up investors take a different approach. They consider company fundamentals, such as management team and earnings growth potential, first.

 

Weekly Focus – Think About It

 

“They always say time changes things, but you actually have to change them yourself.”

--Andy Warhol, American artist

 

Best regards,

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Weekly Market Commentary (February 5, 2019)

Weekly Market Commentary (February 5, 2019)
 
 The Markets
 
And, U.S. stock markets celebrated.
 
Last week, the Federal Reserve put itself on hold. The Federal Open Market Committee met on Wednesday, January 30, 2019, to discuss the state of the economy and determine policy. After the meeting, Fed Chair Jerome Powell offered a positive assessment of U.S. economic strength that was leavened with a few concerns.
 
"We continue to expect that the American economy will grow at a solid pace in 2019, although likely slower than the very strong pace of 2018...Despite this positive outlook...Growth has slowed in some major foreign economies, particularly China and Europe. There is elevated uncertainty around several unresolved government policy issues, including Brexit, ongoing trade negotiations, and the effects from the partial government shutdown in the United States...We are now facing a somewhat contradictory picture of generally strong U.S. macroeconomic performance, alongside growing evidence of cross-currents. At such times, common sense risk management suggests patiently awaiting greater clarity..."
 
Through the end of last week, almost one-half of companies in the S&P 500 had shared fourth quarter 2018 earnings. FactSet reported the blended year-over-year earnings growth - which includes earnings for companies that have reported and earnings estimates for companies that have not yet reported - was 12.4 percent. That's lower than the 20-plus percent growth companies have delivered since late 2017. Analysts believe this is the waning effect of corporate tax cuts.
 
The Bureau of Labor Statistics reported fewer jobs were created in December than had been reported. Unemployment ticked higher for the month because of the government shutdown, reported Bloomberg. All of these could account for the reason the Federal Reserve held back on interest rate increases. Concern for further stimulating the economy was clearly an issue.
 

Data as of 2/1/19
1-Week
Y-T-D
1-Year
3-Year
5-Year
10-Year
Standard & Poor's 500 (Domestic Stocks)
1.6%
8.0%
-4.1%
11.8%
9.2%
12.6%
Dow Jones Global ex-U.S.
1.1
7.1
-14.8
6.7
1.3
6.2
10-year Treasury Note (Yield Only)
2.7
NA
2.8
2.0
2.6
2.7
Gold (per ounce)
1.9
2.9
-1.7
5.4
0.9
3.7
Bloomberg Commodity Index
-0.1
5.5
-9.9
2.2
-8.5
-3.0
DJ Equity All REIT Total Return Index
2.9
10.9
11.6
9.2
10.3
15.6
 
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not 
applicable.
 
 
HERE THEY ARE: SOME OF THE BEST INVENTIONS OF 2018. Time Magazine asked its editors and correspondents to nominate inventions that are making the world smarter and more fun. The magazine whittled down the suggestions to 50 inventions it considers to be the very best. They include:
  • Off-the-rack bespoke clothing. If you have ever found yourself between two sizes or have had difficulty figuring out women's swimsuit sizing, you'll appreciate an innovation offered by a Japanese retailer. All you have to do is put on one of the company's "...stretchy black bodysuits...covered in white dots, which enables consumers to make a '3-D scan' of their bodies in the comfort of their own home, via a companion mobile app." Once you've completed the scan, you can order custom-fit clothing. Next up: custom shoes.
 
  • Blankets that ease anxiety. Science suggests there is a connection between insomnia and anxiety - and we all know how important sleep is. Weighted blankets offer gentle pressure that may help soothe the nervous system and improve sleep, according to Time. Retailers suggest consumers opt for blankets with a weigh equal to 10 percent of body weight. Be forewarned. The blankets come with a hefty price tag.
 
  • A gravity-defying toolbox. If you're looking for the perfect Valentine's gift for a friend or family member who uses tools in tough environments, this might be a good choice. A former F-16 aircraft mechanic designed a flexible toolbox that stays on curved surfaces without slipping.
 
  • A compass that points to friends and family. If you stress over the possibility of a child or pet getting lost at a crowded event or in an unfamiliar place, you may appreciate these paired compasses. They use GPS technology, in tandem with long-wave radio frequencies, to help people keep track of each other.
 
Just for fun, check out the other inventions at Time.com.
 
Weekly Focus - Think About It
 
"The fact is that my brain goes out to play. That's what creativity is - intelligence having fun."
--Joey Reiman, American businessman
 
Best regards,
 
Lee Barczak
President
 
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate. *Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. * The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index. * The Standard & Poor's 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. * The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. * The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. * Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce. * The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. * The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. * Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. * Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. * Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. * Past performance does not guarantee future results. Investing involves risk, including loss of principal. * You cannot invest directly in an index. * Consult your financial professional before making any investment decision.
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Contact Details

Morgan Kenwood Advisors, LLC
5130 West Loomis Road
Greendale, WI 53129-1424
Phone: (414) 423-4020
Fax: (414) 423-4023
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.