Q2 2017 – Market Summary – July 10

The second quarter was strong overall. A steady, boring (in a good way) upward trend was the theme A bit of occasional selling pressure was quickly met with underlying support.

In Q2 international equities lead the march higher. A strong dollar and solid industrial activity in developed markets extended Q1 gains. The election of a centrist president in France provided a stable base for European equities. If Macron can successfully reform labor policies, European momentum toward growth may accelerate which would be a big positive for the global economy. Europe has yet to fully recover from the economic crisis.

Our primary international fund is up 14.30% for the year. Emerging markets equities rallied even more with our main fund up 19.23%. Our international small cap value fund is up 14.18%. International stocks have been a drag for a few years but this is a nice turn and a good example of the benefit of having money overseas.

Bonds chugged along as rates rose slightly and signs of moderate inflation are present. Our core US bond fund is up 2.31% on the year.

US large cap stocks continued their run up 9.54% on the year. US portfolios tilted toward small cap value, our highest potential basket of stocks, lagged. Our small value fund is down less than 1% YTD but up 19.03% over the last year. Such is the nature of this basket of stocks but owning them is likely to be an overall positive over time.

Finally, our momentum factor fund continued to perform well, up 19.86% YTD.

Looking forward, tax reform, continued regulatory relief, low volatility, and a continuation of strong employment figures provide a positive economic light going into the third quarter. Summertime market action is often languid, but the chance for surprise is always present. September is by far the worst month on average producing negative returns overall. There’s no way to know if we’ll get a September dip this year but at the moment resilience persists.

As always, we truly appreciate the confidence you’ve place in us with your assets and I want you to feel free to call at any time regarding your portfolio or any personal financial matter.

Sincerely,

Erik S. Wolfers, MBA, CFP®