Ignore the Headlines, Watch the Trends

"Headlines, in a way, are what mislead you because bad news is a headline, and gradual improvement is not." -Bill Gates, Co-Founder of Microsoft

At FAI, we believe the Bill Gates’ quote above is very enlightening.  Every day, we are swamped with negative news headlines regarding political figures, evil doers, military conflicts, and natural disasters.  Although much of this news flow can have a devastating effect on a person’s psyche, they rarely impact the world’s condition.  Human behavior, world economies, and global markets are interconnected through millions of individuals, all with their own views, opinions, ideas, families and economic circumstances.  Most newsworthy events, although disconcerting, have very little impact on these global masses.  At FAI, we consistently track this news flow for “nuggets” of true behavior changing information.  When we do believe that something in one of these events will cause future changes to the economies or markets of the world, we will certainly react to them by making changes in your portfolio.
 

What is more important to FAI and the way that we invest, is the gradual improvement /deterioration that we see in our fundamental analysis.  One of the things that differentiates us from our competitors is the relentless focus on investment price drivers.  We are constantly trying to cut though all of the “noise” represented by the bombardment of news and headlines in an effort to concentrate on the things that matter to security prices.  Although we do not have a crystal ball and are not perfect in all of these assessments, we believe that we can increase our probability of success by concentrating on those things that impact market values.  Also, our value approach to investing and our diversification strategies provide portfolios with support even when we misjudge an event.  In the age of “fake news” and headline sensationalism, we believe it pays to have a clear viewpoint and long-term outlook to investing.  Here is a brief list of some of the trends we are watching:

Positives

  • Low interest rates
  • Strong consumer confidence
  • Unemployment at historic lows 
  • Tax reform
  • Corporate & consumer balance sheets are solid
     

Negatives

  • Housing market is weakening
  • Consumer spending on goods is weak
  • Low inflation and very little wage growth
  • Lack of tax reform
  • Industrial Production is weak
     

We will continue to monitor both the headlines and larger economic trends and make changes to the portfolio where appropriate.  Thank you for your support of FAI.
 

Curtis Gross, CFA

Chief Investment Officer

IMPORTANT DISCLOSURE INFORMATION

Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by FAI Wealth Management-“FAI”), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from FAI.  Please remember that if you are a FAI client, it remains your responsibility to advise FAI, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. FAI is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the FAI’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request. Please Note: FAI does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to FAI’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

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