Everyone seems to agree: free trade is good for the world economy. However, all sides in this evolving debate have seemingly moved further apart and further away from free trade. If free trade is good, then why not have free and fair trade? This is the argument coming out of Washington, and I’m guessing that the discussion will continue to escalate.
But how far does the escalation go before it affects our economy? Trade constitutes only about 10% of our economy, helping to buffer the effects of any tariffs imposed on our industries. But as more industries and consumers become entangled in this debate, the protests will become louder. Countries where trade constitutes a much larger share of GDP will be hurt more by any increase in tariffs. When the dollar strengthens relative to their local currencies, prices of goods imported for production will rise. Combine increasing inflation with any dollar denominated debt and some of the cracks begin to appear in emerging economies.
In the US, markets have already begun to reflect the consequences of the trade debate with the S&P 500 producing only tepid performance compared to the Russell 2000. Last week’s market activity saw a sell-off in technology, which had been a market leader. New leadership will need to appear. Headwinds seem to be getting stronger as tariffs and rising interest rates look to curtail what has been a very good and lengthy run for the markets. But nothing goes on forever. Finding safe harbor in a market tempest is not always easy but with diversification and a proper asset allocation, managing market turbulence will be made easier. Everything changes and so will this market.
—
Interested in some printable marketing materials to show clients when discussing their options within the Salt Creek Investors platform?
SCI HIGHLIGHTS
WHAT VOLATILITY?
The first five months of 2018 brought an increase in market volatility unseen for years.
Following are some volatility metrics on the SCI Active Allocation strategy through May 31, 2018:
Compare SCI Models to a comparable allocation using the S&P 500 and Barclay’s AGG (assuming correlation of – .15)
___________________________
SCI’s conservative model is 65% bonds & 35% equity
SCI’s aggressive model is 13% bonds / 87% equity
_____________________________________
Diversifying among different asset classes with low correlation coefficients helps to reduce volatility allowing investors to capture more gains per unit of risk.
SCI MONTHLY WEBINAR
Join from PC or Mobile:
Click here for SCI Webinar Login
Meeting ID: 325 159 0655
Dial In Audio: 669-900-6833
Next Session is:
July 10th @ 12pm CDT
A special Q&A session for those interested in the deep analytics underlying the SCI Active Allocation strategy. Submit your mutual fund picks by July 2nd and we will process the funds through our algorithms and prepare a data set to compare the mutual fund’s performance to SCI’s top picks!
LaSalle St. Investment Advisors, LLC
940 N. Industrial Dr.
Elmhurst, IL 60126
Copyright © 2017 LaSalle St. Investment Advisors, LLC., All rights reserved.
The information and descriptions provided about the Program are for educational and information purposes only and should not be used or construed as investment advice, an offer to sell, a solicitation of an offer to buy, a recommendation for any security, or suggest any course of action. LaSalle St. Investment Advisers (“LSIA”) does not guarantee that the information or descriptions supplied about the Program are complete or timely. LSIA makes no warranty with regard to any results obtained from the Program or its deployment. LSIA is not responsible for any direct or incidental loss incurred by relying on information provided about the Program. The allocations presented herein are illustrations and completely hypothetical. None reflect actual investments or investment results and do not reflect allocation of any individual portfolio. Asset allocation and its results vary over time. Other allocations or asset investment categories not offered in the Program may have characteristics similar or superior to those illustrated. Past performance of any model or allocation is no prediction of future results. Neither the Program nor any system/model can predict the future of any market or price movement in a market. Diversification and asset allocation do not guarantee against the risk of investment loss, including risk of loss of principal. Information provided regarding the Program is as of the date of publication and may change at any time without notice. Information has been included which was obtained from third parties and is believed to be reliable and complete. LSIA does not warrant the accuracy or completeness of such information. LSIA is a registered investment advisor and does not provide tax, accounting or legal advice ‒ the information and/or descriptions provided do not constitute such advice. More information regarding LSIA and its investment strategies can be found in the LSIA brochure, ADV Part II, which is available online or through LSIA. Asset allocation may not be suitable for all investors. Before deciding to invest, potential participants should consult with an investment adviser to determine an appropriate investment strategy and methodology which meets the investor’s specific financial needs, objectives, goals, time horizons and risk tolerance. The information and description provided herein has been made without consideration of any investor’s particular suitability for investing in the Program. Asset allocation also involves investment in various asset classes which are not insured by the government. Investing in fixed income and/or high yield securities involves additional concerns including interest rate risk, credit risk and reinvestment rate risk. Investing in securities outside the United States may entail greater risk than investing in domestic U. S. markets. These risks typically include political and economic uncertainty of foreign countries as well as currency exchange fluctuations, including foreign currency exchange rates, political risks, different methods of accounting, financial reporting and foreign taxes. The prospectus accompanying a security should carefully be reviewed before investing. The services described herein are available to persons residing in any state where they would otherwise be contrary to local law or regulation.