News & Insights
YorkBridge Fourth Quarter Commentary
As we begin 2019, most investors are ready to move on from the market gyrations of the 4th Quarter in 2018 and begin focusing on what’s next. But let’s reflect for a moment so that we can set the stage for what we see ahead; there is no doubt the last three months of 2018 proved to be difficult to navigate with the rising rhetoric from the Trump administration around trade, the Fed raising rates for the fourth time in the year, and the third government shutdown of 2018, all contributing to a decline in the broad equity markets and pricing pressures across most asset classes. As 2018 finished, we saw the S&P 500 down around 5% for the year, the price of oil down 40%, and even fixed income assets, typically viewed as a safe haven in times of volatility, declined to end the year lower. Both equities and bonds finished 2018 with negative returns, a rarity, only happening one other time since 1991.
What is perhaps lost in the noise, is that this market action is neither unexpected nor unwelcomed. In fact, what is highly unusual, is the almost total lack of volatility in the equity markets over most of the last decade. While no one likes market disruptions or political uncertainty, we see the recent decline as a healthy occurrence and typical of markets adjusting to new fundamental realities of economic conditions. Valuations are being reset to take into account a slower, yet still expanding, GDP growth rate, tight labor market, and higher interest rates.
This is the opportune moment to reconsider portfolio asset allocations to ensure investments are aligned with both risk tolerances and long-term investment objectives. Timing may matter, but time in the market matters more. With a focus on high quality, long-term investment strategies, we see an opportunity to increase or start positions for our clients as we have not seen valuations this attractive in quite some time. We remain cautious about the political climate and will continue to dutifully monitor certain economic indicators for change, but remain optimistic that we are on a path toward a return to normalcy.
Staying disciplined and adhering to your long-term investment strategy is always difficult during these periods but will be instrumental in helping you to achieve your goals. Our experience has been that negative investor sentiment, and the resulting equity price weakness, have usually presented the patient, disciplined long-term investor with enhanced opportunity. Please do not hesitate to reach out to us should any of your investment objectives change.
The Information contained in this document is based on data received from third parties which we believe to be reliable and accurate. YorkBridge Wealth Partners, LLC has not independently verified the information and does not otherwise give any warranty as to the truth, accuracy, or completeness of such third party data, and it should not be relied upon as such. Any opinions expressed herein are our current opinions only. YorkBridge Wealth Partners, LLC is an SEC Registered Investment Adviser under the Investment Advisers Act of 1940 (“Advisers Act”). Registration of an investment advisor does not imply any specific level of skill or training. The information contained in this document is to assist with general planning. Please consult with your own tax advisor and attorney for more specific information.