Weekly Update – December 31, 2018
The close of the year provides an opportunity for investors to step back and consider the wider financial landscape. This week, we’re reviewing some key issues that defined 2018, as well as some factors that may influence financial markets in the coming year.
Year in Review
Wall Street began 2018 in rally mode, as enthusiasm for the 2017 Tax Cuts and Jobs Act spilled over into the New Year. Strong economic news encouraged investors, who put aside fears that rising inflation may lead to higher interest rates. What Wall Street did not see coming were the spring and summer trade disputes with China, Canada, Mexico, and the European Union. Fear of a global economic slowdown contributed to a sharp decline in stock prices in October. U.S. economic growth forecasts were tempered in November for 2019, with bull and bears engaged in a fierce tug-of-war as the year came to a close. 
After expanding at a middling 2.2% pace in the first quarter, the Gross Domestic Product (GDP) rose 4.2% in Q2 and 3.4% in Q3.  The Federal Reserve Bank of Atlanta forecasted a 2.7% increase for Q4, which will be released on January 30, 2019 by the Bureau of Economic Analysis. [ 3] The Congressional Budget Office expects GDP growth in 2019 to slow to 2.4% “as growth in business investment and government purchases slows.” 
At the close of its September 2018 meeting, the Federal Reserve raised the federal funds rate to 2.25%, a full percentage point higher than it was a year earlier. Federal Reserve Chair Jerome Powell appeared to change his stance on monetary policy, saying interest rates were “just below” a neutral level. Previously, he indicated rates were a “long way” from neutral. 
Consumer Prices and Wage Growth
The number of future interest rate hikes by the Fed may largely depend on its reading of inflation. An uptick in consumer prices or an increase in wage growth may prompt the Fed to consider additional hikes in 2019. 
Trade Talk Progress
Tariffs were a highlight of 2018 news. On July 10, the Trump administration announced a list of tariffs on $200 billion in Chinese goods.  The escalating trade dispute between the U.S. and China is an enormous overhang on the financial markets. The continuing impasse may affect economic growth and push consumer prices higher.
2018 also was a year in which a major trade pact started to come together. The United States-Mexico-Canada Agreement (USMCA) was approved in principle in October. However, the agreement must be approved by Congress and the legislative bodies of Mexico and Canada before it can take effect. 
Rising interest rates and robust domestic growth in 2018 lead to a strengthening of the U.S. dollar. A strong U.S. dollar can negatively affect profits of U.S.-based multinational companies, since it can make their products more expensive to overseas buyers. [ 10] This will also be something to watch in the coming year.
The trend of higher interest rates in 2018 was also felt in the real estate market. The average rate on a 30-year conventional home loan stood at 3.95% in January 2018. At year’s end, it was hovering near 5% according to Freddie Mac. 
We hope you enjoyed this look back at 2018! Next week, we’ll be back to covering the market numbers.
“The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.”
– T.T. Munger
- 2 tablespoons olive oil
- 10 ounces cremini mushrooms (sliced)
- Kosher salt
- 1 pound lean beef sirloin (thinly sliced)
- 2 cloves garlic (finely chopped)
- 2 tablespoons Dijon mustard
- ½ cup dry white wine
- 3½ cups low-sodium beef broth
- 8 ounces fusilli pasta
- 3 tablespoons crème fraîche or sour cream
- On medium heat, heat 1 tablespoon olive oil in large skillet.
- Stir in cremini mushrooms, season with salt and pepper, and cook until browned, 5 minutes. Move to bowl.
- Put the pan back on medium heat. Stir in 1 tablespoon olive oil, season thinly sliced lean beef sirloin with salt and pepper, and cook until no longer pink.
- Add garlic, cook 1 minute, and stir in Dijon mustard.
- Put in dry white wine, cook. Scrape up any browned bits.
- Mix in low-sodium beef broth. Bring to a simmer.
- Mix in fusilli pasta and mushroom with juices. Bring to a simmer again. Stir often until the pasta is al dente, 14-18 minutes.
- Mix in crème fraîche or sour cream. Season with salt and pepper.
Recipe adapted from Good Housekeeping 
Fibromyalgia: What is it, and How Do You Treat It?
You experience chronic muscle pain, fatigue, sleep problems, and tender areas. You may have fibromyalgia.
About 5 million Americans have fibromyalgia, a lifelong condition. Sufferers typically have stiff, sore muscles. The syndrome is not easily diagnosed, but doctors are able to develop treatment plans based on symptoms.
Health experts say your best approach for relief is to get moving. A few minor changes to your exercise routine can give you more energy and ease the pain.
For starters, gently rotate your joints until they move easily. Focusing on the big muscles (calves, thighs, hips, lower back, shoulders), stretch the full range of motion and hold for 30 seconds.
Walking and other aerobic activities can provide significant relief. The secret is to find something you enjoy doing and doing it for 30 minutes a day, five days a week.
Isometric exercises are great too. Isometrics consist of pushing and holding something against resistance. The chest press is one example. Holding your two hands clasped in front of you is a good one. Do five sets. A set is pressing and holding for 10-15 seconds.
Take it easy with workouts at first. Low- and moderate-intensity routines are the best way to get in the habit. Take it slow and easy.
Tips adapted from WebMD 
What’s the Big Deal About Farmers Markets?
Why go to farmers markets when you can just head to the big-box stores to do all your grocery shopping? Besides the freshness of organic, nutrition-packed produce and other items you get at farmers markets, the benefits are big deals.
Shopping at farmers markets nearly guarantees you are buying produce the way nature intended it.
Here are three big reasons why farmers markets are the place to go:
- Family farmers rely mostly on local customers. Family farmers’ prospects of staying in business is nearly 10% greater than farmers who sell in traditional markets.
- Shopping at farmers markets promotes strong local economies. Your money often stays in your community.
- Shoppers at farmers markets often save nearly 25% annually on their food budget.
Tip adapted from EarthShare 
Zack Alkhamis, CRPC, CFS
Matthew Jarrell, CFS, AIF
Timothy A. McAfee, CPA, CFP, PPC, MST
The Retirement Wealth Management Group
7900 Kirkland Court
Portage, MI 49024
Copyright © 2018. All Rights Reserved.
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
Diversification does not guarantee profit nor is it guaranteed to protect assets.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.
The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia, and Southeast Asia.
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.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
These are the views of Platinum Advisor Strategies, LLC, and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.
By clicking on these links, you will leave our server, as the links are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site.