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Mountain Peak Financial, Inc

At Mountain Peak Financial, Inc., we are dedicated to informing our clients and working closely with them to help develop the best financial strategies for their long-term goals. Our goal is to be the trusted lifetime advisor that helps our clients achieve the confidence they deserve for their financial futures.

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Mountain Peak Financial, Inc.  |  1425 W. Foothill Blvd., Ste 115, Upland, CA 91786 MAP  |  Tel: 909.982.2277

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Mountain Peak Financial, Inc. are not affiliated companies.

Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. None of the information contained on this website shall constitute an offer to sell or solicit any offer to buy a security or any insurance product. Charles Ragonese CA LIC #0B02155, Firm LIC #0I088569

Any references to protection benefits, safety  or steady and reliable income streams on this website refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products. Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by insurance company. Annuities are not FDIC insured.

The information and opinions contained in any of the material requested from this website are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. They are given for informational purposes only and are not a solicitation to buy or sell any of the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual's situation.

Neither the firm nor its agents or representatives may give tax or legal advice.  Individuals should consult with a qualified professional for guidance before making any purchasing decisions. Mountain Peak Financial is not affiliated with the US government or any governmental agency. 615813

© 2018 by Mountain Peak Financial, Inc.

2019 1st Quarter Review

April 29, 2019

Transcript:

 

Thanks for joining me again for my quarterly review, where I break down some key events of the quarter.

 

As you may remember, we started off 2019 in the middle of a partial government shutdown that lasted from December 22 to January 25, making it the longest shutdown in US history. If you or someone you know is a government worker, then you certainly know how the shutdown affected individuals. But how did it affect the economy? Believe it or not, historically, government shutdowns have not had significant effects on the economy. On average over the previous 20 government shutdowns, the S&P declined by 0.4% but then climbed by an average 13% in the 12 months following the shutdown. So, despite short-term repercussions, according to historical evidence, economic growth is typically recouped.  We’ll keep an eye out for the rest of the year to see how the shutdown may continue to have an impact.

 

The government shutdown wasn’t the only record set this past quarter! March 9, 2019 marked the 10-year anniversary of the bull market, making it the longest bull market in US history. If you were invested in the markets in 2009 at the beginning of the Great Recession, I’m sure you remember the hit your investments took. If anything, this bull market has truly shown us that patience is a virtue! Take a look at this chart.

Looking closely, we can see all the events that caused short-term declines – things like bailouts, foreign affairs, changes in administrations. Looking at the bigger picture, over these last 10 years, the S&P has rallied 400% including dividends, and the 10-year annual return was 17.5%. So, if you were patient and waited it out in the markets, you may have recovered a good portion of what you lost in 2009. However, if you’re nearing retirement age or already retired and still have your money at risk, you may want to consider getting out of the markets, given that the next market crash won’t be televised ahead of time so that you know to get out, and you may not want to let all your retirement dollars disappear right when you need them! If you would like to discuss options for protecting your retirement assets, give us a call!

 

Towards the end of the quarter, the bond market took headlines again due to the potential inversion of the yield curve. What does that mean and why does it matter? 

 

According to Fidelity investments, “a yield curve is a way to measure bond investors’ feelings about risk, and can have a tremendous impact on the returns you receive on your investments.” If properly interpreted, it can also be used to help gauge the direction of the economy.

 

A normal yield curve means that bonds with shorter maturities expect lower yields, and bonds with longer maturities expect higher yields.

 

 

 

 

 

 

 

 

 

 

When the yield curve is inverted, the opposite is true. Essentially, bond purchasers get paid less for tying up their money for a longer period of time, which is counterintuitive.

 

 

 

 

 

 

 

 

 

 

What does this mean for the state of the economy? Well, in the past, recessions have been preceded by inverted yield curves. It’s an important signal and something that we must pay attention to, but it’s also important to note some nuances. First, the yield curve hasn’t been inverted for long enough at this point to indicate much more than the economy is slowing down, which we can expect after having been in a bull market for so long. An inverted yield curve needs to be realized for at least a full quarter, so we have some waiting to do. Second, an inverted yield curve is not necessarily a good indicator of the timing of a coming recession. In the past, 21 months on average passed in between inversions and recessions. Rather than using an inverted yield curve as a way to time the market, we can use it to start a discussion about your risk tolerance and make sure you’re properly invested for your goals.

 

Thanks for listening and, as always, give us a call if you have any questions!

 

 

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Mountain Peak Financial, Inc. are not affiliated companies. Charles Ragonese CA LIC #0B02155 Firm LIC #0I88569 Investing involves risk, including the potential loss of principal. Any references to protection benefits generally refer to fixed insurance products, never securities or investment products.  Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by AE Wealth Management. This information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. 00143891

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