2nd Quarter Market Recap

Summer McKellar Senior Research Analyst Registered Representative
This past week I joined Clay Moden on WYRK 106.5FM to provide Sgroi Financial’s 2018 2nd quarter market recap as well as our expectations for the next 3 months.

Market Recap

The Volatility Roller Coaster
Half way through 2018 and volatility has made for quite a bumpy ride. Bond and equity investors have shared in the “excitement” of this roller coaster; as the markets react to ongoing trade tensions, the Federal Reserve’s continued interest rate moves; while on the positive side, low unemployment, and stable growth numbers coming out of the US economy. Going into the second half of 2018, we believe lower taxes and regulatory reform could extend the US growth story in the short term. However we believe we are reaching the peak of the global growth outlook considering the more pressing trade war and slowing growth abroad.
Finding Balance
Our investment theme for 2018 has been to find opportunities at the right cost. All of our portfolios are performing as we would have expected in this environment which has led us to outpace our stated benchmarks in each category. By implementing some more passive ETF Investments, we were able to reduce our internal fund expenses on average by 13%. Understanding that cost is not everything, and there is value in active management, our goal is to find the balance between cost and performance.
No Reason to Fear
We understand that investors may be getting more cautious as we could be reaching the top of the market. However there is no immediate catalyst for a reversal in the US growth trend. Companies continue to hire, growth names continue to rally and the US consumer is fueling the optimism. With this being said, we have taken some profits off the table in some of our more aggressive portfolios. Going forward, we are still bullish on technology and healthcare, as well as financials if the Fed continues to raise rates. Internationally the Emerging Markets have the most opportunities and we will continue our overweight to this area. When interest rates rise, bond prices fall; we have seen this thus far this year in our bond holdings and more conservative portfolios. We have increased our hedges to these areas to try to limit the future interest rate risk as we believe the Fed will continue to hike rates. It is important to note, although the performance in fixed income has not been anything to marvel at, when we do reach peak of the ride, bonds will save on the downside and we don’t want to over extend our risk budgets. If you have any questions regarding your specific portfolio, please reach out to your advisor for further details.
You can catch our weekly Plan.Protect.Invest. segment live on WYRK 106.5FM at 7:20am every Wednesday. Each week we will have a Sgroi Financial planner on with Clay Moden and the WYRK morning show to discuss financial topics to educate and help their listeners. Since 1971 Sgroi Financial has proudly served Buffalo, NY and the Western New York community from our West Seneca location.

Sgroi Financial, LLC   BBB Business Review

Check out the background of our investment professionals on: BrokerCheck

Securities offered through Cadaret, Grant & Co., Inc., member FINRA/SIPC. Advisory services offered through Sgroi Wealth Advisory Group LLC, an SEC Registered Investment Advisor. Sgroi Wealth Advisory Group LLC, Sgroi Financial LLC, and Cadaret, Grant & Co., Inc. are separate entities.

Due to various state regulations and registration requirements concerning the dissemination of information regarding investment products and services, we are currently required to limit access of the following pages to individuals residing in states where we are currently registered.

We are registered to sell Securities in the following states: AZ, CA, CO, CT, FL, GA, IL, KY, MA, MD, MI, MO, NC, NJ, NV, NY, OH, PA, RI, SC, TN, TX, UT, VA, and WA