Happy 2019!

You can look forward to seeing your 2018 investment report loaded into your Vestia client portal in the coming weeks. In the meantime we wanted to provide some brief thoughts on the markets looking back over 2018 and forward into this year. If you have questions, please reach out to your advisor.

After logging strong returns in 2017, global equity markets delivered negative returns in 2018. Common news stories from last year included reports on global economic growth, corporate earnings, record low unemployment in the US, the implementation of Brexit, US trade wars with China and other countries, and a flattening US Treasury yield curve. Global equity markets delivered positive returns through September, followed by a decline in the fourth quarter, resulting in a −4.4% return for the S&P 500 and −9.4% for the MSCI All Country World Index for the year.

Q4 market update

A snapshot of how various asset classes fared in 2018. Each of these asset classes is represented in your diversified Vestia portfolio.

So where are things going from here? The answer is simply that we do not know. It is important to remember this is all short term “noise.” Over the long term, we know that markets rise. In fact, after declines of 10% or more, equity returns over the subsequent 12 months have been positive 71% of the time in US markets and 72% of the time in other developed markets. On top of that, the Federal Reserve is still projecting real GDP growth for 2019. We plan to maintain the diversified exposure of your portfolio across global markets, small companies, and value companies as that is the best way to ensure that your portfolio works for you so you can achieve your long term goals while minimizing volatility as best we can along the way.

Our bottom line recommendation remains the same — buy, hold and rebalance — because that is what the evidence has demonstrated is the most likely way to achieve your goals over the long term. Doing so in the face of so much uncertainty, and the stress created by bear markets, is what makes being a successful investor so difficult, despite how simple the winning strategy is. This is why you have Vestia to help!

 

Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows: US Stock Market (Russell 3000 Index), International Developed Stocks (MSCI World ex USA Index [net div.]), Emerging Markets (MSCI Emerging Markets Index [net div.]), Global Real Estate (S&P Global REIT Index [net div.]), US Bond Market (Bloomberg Barclays US Aggregate Bond Index), and Global Bond Market ex US (Bloomberg Barclays Global Aggregate ex-USD Bond Index [hedged to USD]). S&P data © 2019 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. MSCI data © MSCI 2019, all rights reserved. Bloomberg Barclays data provided by Bloomberg.