We hope that you had a wonderful Thanksgiving and were able to spend some quality time with friends and family.  The stock market’s performance thus far in 2019 has given us a lot to be thankful for as the S&P 500 closed November up 25% for the year (Ycharts) while bonds (Bloomberg Barclays US Agg) have returned almost 9% year to date.  We don’t often see such strong returns in both stocks and bonds. As such, many investors are left to wonder what comes next. 

Despite this stock market strength, we’ve highlighted some concerns over recent months, as two elements of our economic dashboard flash a warning sign.  We continue to be cautious as we feel that the chances of recession over the next 9-12 months have risen throughout the year.   That said, stocks are close to all-time highs and we wanted to share some positive data that may have helped the market move higher this year:

• Unemployment is close to a 50-year low with the unemployment rate currently at 3.6% (Wall Street Journal).

• The consumer remains strong as evidenced by 3^rd quarter US GDP growth which showed the consumer driving economic growth of 2.1% (LPL Research).

• The housing market in the US has been strong, hitting a 12 year high in housing starts in September (CNBC).

We are currently hard at work on our 2020 outlook where we will provide further insight in what we expect to see over the next 12 months.  If you have any friends, family, or colleagues that you feel would benefit from our guidance we would be delighted to connect with them, so please let us know.

We wish you and your families a wonderful holiday season.

Sincerely,

Your Team at TLWM
 

* Investment advice offered through TLWM, LLC., a registered investment advisor.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* You cannot invest directly in an index.

* Consult your financial professional before making any investment decision.

* Stock investing involves risk including loss of principal.

* This document is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Texas Legacy Wealth Management and its representatives are properly licensed or exempt from licensure.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* Credit risk can be a factor in situations where an investment’s performance relies on a borrower’s repayment of borrowed funds. With credit risk, an investor can experience a loss or unfavorable performance if a borrower does not repay the borrowed funds as expected or required. Investment holdings that involve forms of indebtedness (i.e. borrowed funds) are subject to credit risk.

* Typically, the values of fixed-income securities change inversely with prevailing interest rates. Therefore, a fundamental risk of fixed-income securities is interest rate risk, which is the risk that their value will generally decline as prevailing interest rates rise, which may cause your account value to likewise decrease, and vice versa. How specific fixed income securities may react to changes in interest rates will depend on the specific characteristics of each security. Fixed-income securities are also subject to credit risk, prepayment risk, valuation risk, and liquidity risk. Credit risk is the chance that a bond issuer will fail to pay interest and principal in a timely manner, or that negative perceptions of the issuer’s ability to make such payments will cause the price of a bond to decline.

* No strategy ensures a profit or protects against a loss.