Market Expectations: The Long View

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Nov 01, 2017

By Tim Terry, Founder of World Trend Financial and Terry Lockridge & Dunn and Tory Meiborg, President and Partner at World Trend Financial

We have seen significant growth in the value of equities during this current year. The S&P 500 has risen 16.09% from the period of 1/1/2017 through 10/26/2017. For many, this has been seen as a long overdue catch up for equities. Others are not certain and are raising important questions as to how long the market can rise without serious correction.

There is no doubt the future will see a major correction or decrease in the prices, particularly of domestic equities. Properly understood, this is a natural event in markets. When there is a major correction, most equity-based portfolios will suffer some loss of value.

While we accept that a market sell-off could occur, and portfolios drop in value, at World Trend Financial we advocate maintaining a defensive diversified global portfolio as well as holding a five-year safety margin of cash reserves invested in fixed income securities.

We have always taken the long view. This is a luxury we enjoy because our clients know having their cash needs addressed for the next five years gives them the security of a predictable future. While we have no guarantee of what will happen inside a five-year time horizon in the equity market, experience has taught us the long-term value investor will be protected from short term price surges.

At the same time, the investor will realize a reasonable risk adjusted return on investment assets.

Investing is serious business in all markets. We are committed to protecting our clients from market volatility while keeping on track with their long-term investment goals.

If your investments are making you nervous, give us a call today. We, or any of our investment advisor representatives, can be reached at 319.364.3041 in Cedar Rapids or 319.339.4884 in Iowa City.