The Prudent Retiree - January 2019
“Welcome back my friends to the show that never ends.”
- “Karn Evil 9” by Emerson, Lake & Palmer
A new year. Hopefully, a new market. After a bad 4th quarter, the market is up sharply to start 2019. What has changed? The Fed for one. The market was frightened that the pace of interest rate hikes was too aggressive and not guided by underlying economic conditions. You don’t fight the Fed. That fear has been largely put to rest by the comments from Chairman Powell and other Fed Governors that rate hikes aren’t on autopilot and for the moment no need for further increases.
Emerson, Lake & Palmer released the song, “Karn Evil 9”, that contained the above lyrics in August of 1974. What else happened in August of 1974? President Nixon resigned from office when leaders from his own party informed him that impeachment and conviction were inevitable. Watergate, coverup, obstruction—Yogi Berra might say this is deja vu all over again.
Year in, year out we can count on our elected officials to provide us with corruption, scandal, fighting and name calling. Truly, the show that never ends. Emerson, Laker & Palmer said the show was guaranteed to “blow your head apart”. Turn on the news or talk shows.
Fortunately, the American economy is strong. Unemployment is near record lows. Inflation hovers at around 2% and interest rates remain relatively low. These are favorable conditions for the market and why we believe the 4th quarter of 2018 was a correction, not the start of a crash. We believe the market will move higher.
We do have a concern about China and trade. The market does not like tariffs. It appears that negotiations may well lead to resolution. The US and China are intertwined economically and it’s in the best interest of both to reach an agreement.
It’s always a challenge to figure out what all this means to our investments. The name of Emerson, Lake & Palmer’s album from 1974 was Brain Salad Surgery.
Prudent Retiree wants to recognize and remember Dr. Martin Luther King, Jr. His courage and vision have inspired our nation and people around the world. His legacy of hope and justice continues to resonate.
Here at Horseman Group, we strive to provide you with the highest possible level of customer service. Feel free to reach us at 314.692.7842 with any questions regarding your investments, risk management, or retirement.
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Horseman Group – 3 CityPlace Drive - Suite 290 – St. Louis, MO 63141 – 314.692.7842 – www.horsemangroup.com
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
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