Investment Notes

• Scott Wren, Bryan, Sameer (Sr market strategist) Samada, Paul
• Big Picture
  • Economy in good shape
  • No recession predicted for 2019 +
    • Strong holiday sales
    • Economy may slow
      • Scaring the markets
    • Job market strong
    • Wages rising faster than inflation
  • Yellow light – caution
    • Credit card balances are rising
    • Interest payments are low
    • Home prices are rising
  • Businesses
    • Hiring
    • Costs are increasing – eg wages
  • Manufacturers showed sloing third straight month
    • Tarriffs causing problems
    • Corp debt high

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• Federal Reserve could make mistakes
• Partial Government Shutdown
• What is going to happen with Global Growth
• Look at markets monthly and adjust targets and trading
• Attractive returns next 12 months
• Stay invested, but look for opportunities
• Rate industrials and financials and health care sector – all favorable
• Utilities – Secure place to hide – Not enough movement or profit
• Stocks do well in modest growth and moderate inflation environment – planned for 2019

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• Investment Strategy Report – NEXT WEEK – CHECK IT OUT
• 25 worst quarters – 4th of 2018 was 20th worst quarter – NOT GOOD
  • Russell Index Fund
• Average return 12 months later was about 15% – S&P return was about 70%

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• Strategy – Figure inflation outlook
  • Look at Technicals
  • Treasury yields move lower with selloffs
  •  – move higher with stability
  • Probably about 3%
  • Yield Curve – CHECK IT OUT – Has been flattening
    • Hope for meaningful inversion
    • 4 consecutive weeks – reasoned to be concerned
    • Flattening is good
  • Short term higher interest than long term – BAD
    • Bonds expect recession

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• Why even keep bonds?
  • Diversification – Limits volatility – Protects portfolio
  • Short term have done bad
  • Long term has done reasonably good
  • Better than equity markets at this time – Significant losses
  • PREFERREDS – Asset Class – Subject to volatility
    • Selloffs in times of stress

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• What should an investor do
  • Make sure your plan is up to date – MEET WITH JOHN
  • Do not over react
  • Do not hide – properly allocated – diversified – rebalancing
  • Market = downtrend vs uptrend
    • Returns lower – allow time
    • Dollar cost averaging – RESEARCH

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• Cash things in – wait this out – NO – THAT IS OVER REACTION
  • Make sure you know what your liquidity is, and do we have enough to carry us through
  • Don’t be a forced seller – Wait for the upturns
  • Inflation about 2%

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1. Growth continues – Stay with your plan – Work with John
   1. Separate living expenses and money to be invested in market
   2. Maintain discipline

• Listen to recording
• January 3, 2019
• Wells Fargo Investment Institute
• Consider investment strategies and risk tolerance