Market Alert February 1st, 2019: The Worst Investor Confidence On Record

As a firm that specializes in Retirement Planning, our two goals for you are:

  1.  For you to have Financial Peace of Mind and
  2. For Your Money to Last As Long As You Do.

Our investment philosophy of Buy, Hold, and PROTECT! is designed to give us Unlimited Upside with a Tolerable Downside.

  • The Federal Reserve promises to be “patient” on any future interest-rate moves.

The Federal Reserve promises to be “patient” on any future interest-rate moves.

Just last month the Federal Reserve was telling us that they were going to raise interest rates four times this year and this week they walked that back. The S&P 500 index rose almost 2% on that news.

Investors must be thinking that the Federal Reserve will not overshoot with interest rates and cause a recession. In our opinion, the fact that the Federal Reserve is not as enthusiastic about raising interest rates is bad news about the economy.

Normally if things are going very well, the Federal Reserve would have no qualms about raising interest rates. That must have been how they felt last year when they were telling us they were going to raise interest rates. We believe that their view of the economy has changed for the worse and that is why they have decided not to raise interest rates as aggressively.

We have been reporting to you for weeks that we felt that the world economy was slowing and the Federal Reserve was myopically looking only at the US economy. In their statement, they finally acknowledge that the global economy is slowing down.

The smart money seems to agree with us.

The European Central Bank and the International Monetary Fund warned of growing downside risk to the global economy and have reduced their growth forecasts.

State Street Global Markets’ monthly index of global institutional investor confidence fell to the lowest level on record. It is now even lower than during the financial crisis, according to Bloomberg. Bloomberg also reports that this index has higher credibility than surveys do because it is measuring the actual trades that these institutional investors are making and not their opinion.  The index represents 15% of all of the world’s tradable assets.

We have also reported to you that we believe the bond market is way smarter than the stock market because stock market investors tend to have a love affair with their investments while bonds are loans and institutions making loans are not in love with the people they are lending money to.

Most US Treasuries (bonds) went up last week in spite of the Federal Reserve saying they would not raise interest rates as rapidly. This seems illogical since bonds generally go down when interest rates are stabilizing or rising, unless the bond market sees bad things ahead, in our opinion.

As you know the bond market has predicted every recession that we have had in the US in the last 50 years, according to CNBC.

All we can say is that we are so glad we had our Buy, Hold, & PROTECT! Strategy in place. Aren’t you?

We shall see where all of this goes over time, but the trend is down despite the very attention-getting up days that we have seen. We must remain cautious and not let short term rallies cause us to panic and buy too soon.

If you are not a client of Money Matters, we want to visit with you!  Let us worry about all this so that you don’t have to.

Over 50? Schedule a free retirement consultation with one of our financial advisors. We will help you to make the important financial decisions needed to create your personalized retirement plan.

  • Do you know if you have enough money to retire on?
  • Do you have a plan for what to do when the next market crash comes?
  • What are 5 strategies that you can use to reduce your income taxes?
  • How do you plan for your retirement cash flow?
  • What should you do to maximize your Social Security benefits?
  • Are you diversified the way you should be?

We would love to review your retirement plan with you and see if we can help you. If we can help you, that’s terrific, if not that’s fine too. Either way, there is no charge, there is no obligation, and we will part friends!

We are thankful that we have a sell strategy.

Our strategy enables us to participate in the upside as long as it lasts; it is also designed to get us out with tolerable losses when the trend changes.

And we all know that the trend can change quickly and precipitously.

I would like to invite you to come to one of our seminars. They are designed for those of you who are retired or retiring soon, and they are free.

At the free retirement seminar we will answer these burning questions:

  • How do I protect my retirement from the next market crash?
  • How do I avoid three basic “pitfalls” of retirement distribution planning?
  • Am I on track to be able to retire?
  • When should I take Social Security? 62? 66? 70?
  • Am I diversified the way I should be?
  • How much can I afford to spend during my retirement?
  • How can I fight inflation?
  • How do I determine how much risk is appropriate for me?
  • Do I take my pension or a lump?
  • How do I avoid having 85% of my social security getting taxed?
  • Should I rollover my 401(k)?
  • How do I reduce my income taxes in the future?

Click here to reserve your spot at the next free retirement planning seminar

Click here to listen to this week’s podcast and hear the following topics:

  1. The Best January Since 1987!
  2. The Hurdle Rate: How To Calculate How Much Risk To Take
  3. How To Take Social Security If Married: Questions Answered
  4. Buy, Hold, and Protect!
  5. Estate Tip: The Role Of Executor

Look at the chart below:  what do you think is going to happen next?

There is nothing more important to us than that. It is our singular goal to keep our clients from becoming poor. Preserving the wealth that they have built is job number one for us. I encourage you to join the Money Matters family!

I believe that avoiding large losses is the single most important thing that we should be concerned about as investors.

Perhaps you were given a package by your employer. Perhaps you sold an asset and want to know how to properly invest the proceeds. Perhaps you inherited money and want to keep it safe and grow it if you can. Perhaps you just want a second opinion. These are all reasons for you to take advantage of all of the resources that we at Money Matters have to offer you.

We want to help you to achieve your retirement goals.

Thank you for subscribing to this newsletter. I hope it finds you and yours in good health and spirits.


Ken Moraif, CFP®, MBA