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NEVER RETIRE:

Compass Ion Advisors held an event at our offices this past week with the speaker Bob Perkins.  The title of his talk was:  “Never Retire”.  That is not a typo.  It was a thought-provoking and highly engaging (and at times humorous) discussion.  Click here to watch Bob’s presentation..

 

A SIGH OF RELIEF IN EUROPE:

In France the top two vote getters in the first round of the presidential election go to a run-off.  Last Sunday, French voters expressed their dissatisfaction with France’s two established parties by giving two outsiders the top positons.  Centrist Emmanual Macron, with 24% took the top postion and Marine LaPen, a right wing populist took second with 22%.  LaPen wants out of the European Union, and a stronger showing by her would have spooked the markets.  The polls are indicating that Macron will win the May run-off election by a large margin which gives those favoring the EU a sigh of relief.  European and U.S. markets soared on the news.

GDP:

The U.S. economy, as measured by the Gross Domestic Product, increased by 0.7% in the first quarter.  The general expectation was about 1%.  This continues a roughly decade-long trend of poor first quarters.  During the quarter consumer spending rose just 0.3%.  Businesses had been building larger inventories but slowed way down in the first quarter.  Government spending decreased 1.7%.  The good news is that residential investment grew at a 13.7% annual rate (as limited inventories of existing houses increased prices).  This is generally a leading economic indicator.  Also, although businesses took a pause on adding inventory, they substantially increased spending on large capital expenses such as equipment and new buildings.  This is also a leading economic indicator.  The second quarter must pick up to sustain any level of consumer and investor confidence.  Stay tuned.

STOCK INVESTORS EXCITED BY FRENCH ELECTION AND BORED BY GDP DATA:

Early last week, stock prices soared on the French election news.  The main French stock index rose 4%, the broader European indices rose over 2%, and the S&P 500 rose over 1%.  Later in the week, when the lackluster U.S. GDP data was announced, markets barely moved.  For this past week, the S&P 500* increased 1.51% (up 6.49% for the year).  The MSCI All Country X US* increased 2.45% (up 10.53% for the year).  The Barclays Global Aggregate Bond Index* decreased 0.05% (up 2.84% for the year).  The HFRX Global Hedge Fund Index* increased 0.47% (up 2.12% for the year).

AVOID THESE FOUR MISTAKES:

According to a recent article in U.S. News, retirees, or those contemplating retirement (and I would argue, those far, far away from retirement) should avoid these four mistakes.

  • Avoid the performance-chasing trap.  (Don’t try to time the market or try to find the top performer.)  I would add: yes, even Apple!
  • Remember to rebalance.
  • Do not underestimate the impact of inflation.
  • Double your efforts to diversity.
     

References:

GDP:  http://www.calculatedriskblog.com/2017/04/bea-real-gdp-increased-at-07-annualized.htmlhttps://www.usatoday.com/story/money/2017/04/28/economy-posted-feeble-growth-q1/100995626/https://www.wsj.com/articles/u-s-gdp-rose-0-7-in-first-quarter-1493382900
A SIGH OF RELIEF IN EUROPE: https://horsesmouth.com/the-french-election-why-the-eu-is-breathing-a-sigh-of-relief-for-now;