March 19, 2018

Weekly Market Commentary
March 19, 2018

The Markets

It’s a good time for a gut check.

The issues bothering the market include:

• Special Counsel Robert Mueller’s subpoena of the Trump Organization.
• The effects of recent tariffs and the possibility of trade wars.
• The departure of Secretary of State Rex Tillerson.
• The Atlanta Fed revised its Forecast downward for the first quarter of 2018. Weakness in consumer spending, net exports, and inventory investment offset gains in private fixed-investment growth.
• The Commerce Department reported weak retail sales for the third month in a row. Economists had expected sales to rise.

Here’s the thing: During 2017, volatility settled at historically low levels and stock markets moved ahead. As a result, it was relatively calm for investors. It’s possible 2018 will be more or a winding road. It is important to realize that it’s normal for the market to be 50/50 positive vs. negative in a 12 month period but studies show over 3 and 5 year periods the positive returns outweigh the downturns.

No matter what happens in the months to come, we reassess and monitor your portfolio and asset allocation on an ongoing basis.

HOW MUCH DO YOU SPEND ON HEALTHCARE? Healthcare costs have been going up for a long time. The Centers for Medicare & Medicaid Services reported annual health spending – healthcare paid for through private health insurance, Medicare, Medicaid, or out-of-pocket spending by businesses, households and governments – in the United States averaged $3.3 trillion in 2016.

That’s about $10,348 per person. It’s a significant amount even before you consider the median income in the United States was about $57,600 that year.

Here’s another perspective: Healthcare spending was equal to almost one-fifth (17.9 percent of GDP) of everything the United States economy produced during 2016.That’s more than U.S. manufacturing produced (11.7 percent of GDP) during 2016. Add in retail (5.9 percent of GDP) and the total is just shy of spending on healthcare.

The cost of healthcare is important not just because it’s high, but because it’s a critical aspect of retirement planning. A retirement plan is built around a horizon, which is the number of years you expect retirement to last. It’s a difficult number to think about because it’s a reflection of how long you expect to live.

In general, the planning horizon for women should be longer than the planning horizon for men. Women tend to live longer, and that means their healthcare costs may be higher.

Focus On The Positive

If you ask me anything I don’t know, I‘m not going to answer. -Yogi Berra