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Economic Commentary: Q2 2019

Investment Directions - Spring Forward

Once again, spring is near, a time of growth, renewal and restoration. But with concerns over slowing growth, uncertainty around economic and earnings outlooks, and ever-present U.S.-China and European political risks, investors should be prepared for potential spring volatility. Our take on the major themes for this quarter: 

U.S. Equities: The Healthy Healthcare Sector 

In an environment of slowing growth and less certain earnings outlooks, the traditional defensive qualities and resilient earnings growth of healthcare stocks are appealing. Plus, valuations broadly look reasonable compared to historical levels. Tactical investors may consider getting more granular with the medical devices industry.

Developed markets: What Next for Brexit?

With Theresa May’s Brexit plan resoundingly defeated, she must now renegotiate a deal. We believe the United Kingdom is likely to avoid a hard exit with an extension of the March 29 deadline to exit and gain time to draft a passable proposal. But lingering uncertainty is likely to keep U.K. assets under pressure while a deeper slowdown in European and global growth only accentuates the challenges. We remain underweight in U.K. and European equities.

Emerging Markets: China Looking Ahead

Although Chinese equities tumbled in 2018, we continue to favor China as well as emerging markets overall. Although trade tensions are likely to persist, we believe frictions will subside in the short run. And we find trade tensions are reasonably priced into Chinese equities. Meanwhile, accommodative policy measures and sustained earnings growth in China could lift investor sentiment.

Fixed income: Ballast Matters

In 2018, investors were rightly concerned about duration risk as interest rates rose due to Fed tightening, inflation fears and rising deficits. But during December’s equity sell-off, yields fell—long-duration U.S. Treasuries (as measured by the ICE U.S. Treasury 20+ Year Index) returned +5.6%—a stark reminder of the key role bonds can play as a diversifier in a portfolio. We favor holding long-duration Treasuries and highly rated investment grade bonds for this purpose.
 

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Economic Commentary: Q3 2019

By Lineweaver Financial Group
July 02, 2019 Category: Economic Commentary, Review, Q3

Investment Directions - Staycation or Vacation? Sell in May and go away is an old maxim for investors. Evidence is mixed on its validity, but given this years rally, the temptation now is understandable. Our take: consider taking some profits and rotating into exposures that offer more resilience if volatility returns. Think of it as the investor version of a staycation and catch up on chores. With that in mind, our take on the major investor themes for the weeks ahead: U.S. Equities: Reverting to Technology We remain overweight U.S. equities, and one of our favored sectors is technology. Even with strong performance this year, we believe the sector remains appealing. Technology firms tend to have strong balance sheets and enjoy support from longer-term trends, attractive qualities in a late economic cycle. Furthermore, tech stocks have historically fared well through various yield curve regimes. Developed Markets: Europe Poised for Revival? Investors in Europe have had little reason

Healthwatch: Tips for Lowering Your Risk of Dementia

By Lineweaver Financial Group
July 02, 2019 Category: Dementia, Healthwatch, Health, Q3

Theres no effective treatment for dementia, which affects 50 million people worldwide, but the World Health Organization (WHO) says theres much that can be done to delay or slow the onset and progression of the disease. In May, WHO issued the following recommendations to reduce the risk of dementia globally, and combat cognitive decline: Regular physical exercise Dont use tobacco Drink less alcohol Maintain a healthy blood pressure Eat a healthy diet, particularly Mediterranean foods Avoid dietary supplements such as Vitamins B and E WHO said there are 10 million new cases of dementia every year, and this figure is set to triple by 2050. The disease is a major cause of disability and dependency among older people and can devastate the lives of affected individuals, their careers and families, the organization said. Although the report stressed that social participation and social support are strongly connected to good health and individual well-being, it said there was insufficient

Bipartisan Support in Congress to Make Retirement More Secure

By Lineweaver Financial Group
July 02, 2019 Category: Congress, Retirement, IRA

by LFG Tax Director, Mark Sipos On May 23rd, 2019, the U.S. House of Representatives voted overwhelmingly in favor of the SECURE Act, which stands for Setting Every Community Up for Retirement Enhancement. Most of the provisions in the act are designed to make it easier for more people to save for retirement, and for more employers to offer retirement plans for their employees. One notable provision in the bill would essentially end whats known as the stretch IRA. Under the current law, when a beneficiary inherits an IRA, the beneficiary can choose to have the IRA balance distributed in two ways: either in required minimum distributions based on his or her life expectancy, or during the five years after the original account holder passes. Making maximum use of the IRAs taxdeferred compounding like this is known as a stretch IRA. Under SECURE, in most instances an inherited IRA would have to be fully distributed within 10 years of the original owners death, although there are some exceptions. Some

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