At the beginning of 2019 if you had asked us if we expected a year of strong market performance, we would probably have used terms like “cautiously optimistic”, as we were coming off a soft 2018 that had been rocked by interest rate increases, tariffs and talk of a trade war. 2019 was a successful year despite that uncertainty and the associated volatility. Markets were able recover completely from the global sell off and even rose to record highs.
The slow and steady market increases that we had experienced and come to expect in the earlier part of the decade seem to have faded and volatility has returned. In spite of that, our message remains the same-----we cannot let short-term insecurity affect our long-term plan.
Investors are now looking to the future and how to be successful in the new decade. Markets hate uncertainty and there is still plenty of that in 2020. Whether that is the presidential election, the trade war with China, Brexit, or the looming recession the media keeps talking about. We expect volatility in 2020, but that will create opportunities for investors.
Looking as far back as 1932, history teaches us that markets historically do better in the first year following a presidential primary than any other year. This has held true no matter which political party wins the election. This is an interesting record but is certainly not a guaranteed outcome.
Moving forward, working with institutional investment managers with outstanding research and flexibility will continue to be important. We work with those we consider to be the best in their area of expertise.
The past decade has been incredible for the U.S. markets, but many investors are surprised by the chart below.
The majority of the top 50 companies over the last decade have been outside of the United States, and for that reason, we continue to include funds in client’s portfolios that invest in stocks and bonds all over the world. These are companies that have a global presence, no matter what is happening in their country of domicile. There is still demand for their product or solution around the world. We should not care where a company gets their mail, but instead where they get their money.
There is opportunity for growth going forward, but it is still important to prepare for volatility. One of the ways we build portfolios to prepare for choppy markets is to own the right types of bonds to balance out portfolios. Over the last six major market pull backs both corporate and municipal core bonds greatly outpaced the S&P 500, helping investors keep more of their hard-earned savings during volatile periods.
2019 was eventful for us here at Brent Forrest & Associates, LLC. We spent the year watching the construction of our new office at 366 W. Sunset Road and moved into the space in early December. We are looking forward to meeting with you here and will plan to remind you about the new location when you have an appointment scheduled with us.
Our professional family here at BF&A grew last year, with the addition of three new staff members.
The need to add new team members is reflective of the growth of our business, as well as our desire to continue to improve our client’s investment and service experience with BF&A. We have improved and expanded our technological capabilities with a new website and client portal, but will always consider warm, personal contact with clients to be our highest priority. Thank you for being a part of our client family. We appreciate you and are looking forward to seeing you in 2020.
All the best-
— Priscilla "Cilla" McKinley