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Thanksgiving Update 2018 - YouTube
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eppie Thanksgiving and thanks for taking
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time to watch this short video with the
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holidays upon us we wanted to give you a
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quick economic update that also
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addresses the volatility that we are
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currently experiencing I assume
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everybody's noticed that we have been
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spoiled the last few years with
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relatively low volatility so the current
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volatility seems both scary and unusual
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the only problem with that statement is
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that it's not true the markets have
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actually been volatile over the last
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eight years even though the trend has
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been up this uptrend causes us to forget
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the volatility but we've had Corrections
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of 10% or more in 2010 and went
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corrected 16% in 2011 it corrected 19.4%
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2016 14 point 2 and we've had two
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Corrections two corrections already in
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2018 so with unemployment at an all-time
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low the economy doing well and over 80
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percent of companies exceeding third
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quarter earnings expectations why is the
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market going down first and foremost
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that's just the nature of the market and
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investing remember we are long-term
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investors and not market traders long
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term investors not market traders
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virtually all the financial information
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you get in print radio and TV is for
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market traders not long-term investors
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employing strategic asset allocation
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like us let me repeat that because it's
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important virtually all the financial
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information you get in print radio and
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TV is for market traders not long-term
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investors employing strategic asset
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allocation like us we have narrowed down
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the economic issue to two areas the
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trade war with China and the current
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Federal Reserve now let's discuss each
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of those in a little bit more depth
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first the trade wars with China
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trade wars are in no in proposition both
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parties get hurt in the process and they
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typically do not last long
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we believe the markets are pricing in a
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very long trade war but my prediction
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our prediction here at NCA is it will be
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over by the end of the first quarter of
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2019
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with minimal damage to the economy now
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the Federal Reserve the Federal Reserve
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has a dual mandate first employment
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let's keep people working and to control
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inflation which it does through raising
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interest rates we've all seen that
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happen while not an official mandate
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though it certainly could fall under
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people keeping people working the Fed is
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responsible to administer a booster shot
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if the economy starts to weaken we see
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this take place quite frequently in the
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past when the Fed lowered interest rates
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so what's the issue the issue is that
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the new Federal Reserve Chairman will
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not use the words data dependent the old
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chairwoman would say we planned the
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raids rates three times next year but we
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will be data dependent meaning that if
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the economic data turns negative they
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won't raise rates the new Chairman is
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saying we are raising rates next year
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and Fed Watchers are interpreting that
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as no matter what the data we are
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raising rates I personally believe that
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this Fed will be headed dependent but
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this Chairman is more focused on raising
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rates so he has more arrows in his
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quiver to lower rates when the economy
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goes negative so he's concerned there's
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not enough room to move down if the
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downward cycle should approach us we are
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watching this delicate balancing game
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closely and will continue as always to
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keep you informed most importantly at
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this point we do not see anything
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systemic though statistically we should
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see another recession in the next
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couple years they actually happened
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quite frequently but we predict the
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normal recession not an event like 2008
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it's only a month or so away so I want
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to take this opportunity to wish you and
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your family from our family here at NCA
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a Happy Hanukkah Merry Christmas and a
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very happy and healthy New Year please
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enjoy this special time of year with
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your family and we will keep an eye on
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the investments and the economic
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landscape for you if you have any
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questions at all or concerns as always
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please do not hesitate to call your
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financial professional here at NC a take
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care
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