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Quarterly Market Review: April-June 2018

The Markets (as of market close June 29, 2018) The second quarter of the year can be called a lot of things, but boring isn't one of them. The potential for a trade war between the United States and China heated up in April as China responded to the threat of U.S. tariffs on Chinese imports by warning of the same magnitude of tariffs on American exports. Favorable corporate earnings reports helped calm some of the global economic angst investors may have felt. The indexes listed here ended the month ahead of their March closing values — but only barely. The Global Dow (1.16%) and the Russell 2000 (0.81%) posted the largest monthly gains, followed by marginal upticks in the S&P 500 (0.27%), the Dow (0.25%), and the Nasdaq (0.04%). Despite expanding trade tensions between the United States, China, Canada, Mexico, and the European Union, equities enjoyed a better month in May, riding surging energy stocks. For most of the month, oil prices hit multi-year highs before falling at the end of May ...

What are the Risks of Self-Directed Individual Retirement Accounts (IRAs)?

By Bill Dolan, Senior Portfolio Manager, California Wealth Management Originally published in the Sacramento Business Journal Investors are faced with many important decisions as we navigate a competitive and often confusing economic and business landscape. How we choose to allocate our resources (wealth) is the most important decision investors must make and largely the determinant of our success. Self-directed IRAs (Individual Retirement Accounts) offer investors the opportunity to allocate wealth to investments that are not available in IRAs where there is a regulated institutional trustee or custodian and this can be appealing to certain investors. Risk and reward are imbedded in investments, inherent to investing, and need to be assessed and understood in order to make sound investment choices. To be sure, the wide array of non-traditional investment options available in a self-directed IRA can be attractive to some investors. However, the very nature of “self-directed” leaves investors ...

Market Month: May 2018

The Markets (as of market close May 31, 2018) Despite a sell-off on the last day of the month, equities held enough of their gains to post mostly positive month-over-month returns. The Trump administration imposed tariffs on steel and aluminum imports on Canada, Mexico, and the European Union. And, just before scheduled trade talks with China were to resume, President Trump announced that he would proceed with tariffs on Chinese imports and limit Chinese investment in U.S. tech companies. Investors feared retaliation from impacted countries could lead to an all-out trade war. Early in the month, signs of rising inflation sent large caps down, while small caps and tech stocks climbed. However, stocks recovered following the Fed's decision to maintain the current interest rate range. Throughout the month, stocks rallied, then slipped back, amid trade war fears, a few mediocre corporate earnings reports, and fear of rising price inflation. Nevertheless, each of the indexes listed here posted monthly ga ...

Important Notice Regarding a Change in Your Money Market Option

The purpose of this notice is to inform you of changes we will be making to the current money market option we use for the cash balances associated with your account. In July 2014, the Securities and Exchange Commission approved new rules that alter certain features of U.S. money market funds. These changes include the possibility of the price per share fluctuating from its long-standing $1.00 per share value, having potential fees for redemption and the potential for not allowing redemptions under certain conditions. While these occurrences may not ever happen and/or be rare, we have continued to seek alternatives that avoid any of these potential factors for our clients. As you know, we are currently using the Federated Government Obligations Premier Money Market fund for the short-term investing of cash that has been received or deposited into your account pending further investment or distribution. Effective July 1, 2018 we are switching to the Insured Cash Sweep, a Promontory InterFinancial Netwo ...

Building and Preserving Your Company’s Legacy

Originally published in the Long Beach Business Journal. Written by Deborah L. Harrington, Vice President and Wealth Advisor for First Bank Wealth Management. Charles Antis, CEO of Antis Roofing, along with his crew, on top of a roof volunteering in support of his company’s "Give to Grow" culture. Values are important to all of us. We’re governed by them in our daily life, whether we recognize them or not; they guide our decision making. Values are a reflection of who we are, what’s important to us, and how we manage and define our purpose. When it comes to company values, it’s really not any different. Company values provide the framework that engages employees, clients, stakeholders, all of its audiences and, ultimately, shapes the company culture. Some companies choose to have two or three core values and some have but one core value that defines them. Consistent with all companies, however, is the fact that the company’s culture is the language of the b ...

Why Staying the Course with a Long-Term Investment Strategy is Important

CHARLES CLAVER, VP/WEALTH MANAGEMENT ADVISOR AND INFINEX REPRESENTATIVE FIRST BANK WEALTH MANAGEMENT With the recent market volatility, investors are increasingly anxious when reviewing their portfolios, along with the seemingly endless barrage of unsettling news around the globe, interest rate hikes, and gridlock in Washington. After a decade of market growth, the sub-prime meltdown of February of 2009, when the stock market was down around 50% from its high, seems a distant, but still painful, memory. Market volatility, periodic corrections, and even recessions, are normal parts of the financial cycle. With these being the case, having a wealth management advisor is critical in maintaining a disciplined, balanced, and long- term view of the markets in order to successfully achieve your financial and wealth goals. The financial markets are still a main investment avenue for most Americans. The good news is that the capital markets have rewarded long-term investors. The markets represent capitalism a ...

Alternative Investments and the Role They Play in Portfolio Construction

By Bill Dolan, Senior Portfolio Manager In the wealth management industry, we define alternative investments as any investment asset, other than stocks, bonds, or cash. So, obviously, this is a pretty broad category and can often mean different things to different people. Let’s take real estate, for example. Since real estate is not stocks, bonds or cash, it is classified as an alternative investment in our industry, but to many people, real estate is even more familiar than stocks or bonds and, therefore, seems every bit as traditional. However, for purposes of our discussion, we will stick with the framework of stocks, bonds, cash, and everything else, or alternatives. Some other examples of investments that fall into the alternative investment category are private equity, hedge funds, precious metals, commodities, and private debt. With the recent turbulence that we are seeing in the markets, it’s consequential to consider the role alternative investments can play in a portfolio tha ...

Market Month: April 2018

The Markets (as of market close April 30, 2018) April was marked by the impending tariff war between the United States and China. Tensions between the world's two largest economies certainly affected stocks both home and abroad. Escalating strife in Syria posed an additional reason for investors to be concerned. However, surging energy stocks lifted the market as crude oil prices approached $70 per barrel for the first time in almost three years. Talks between North and South Korea also helped ease investor tensions. By the close of April, the dollar reached its highest level since January, while yields on 10-year Treasuries approached 3.0% for the first time since 2014 — signs that the world views U.S. economic growth as on the rise. With all of the upheaval during the month — both positive and negative — it's no wonder that equities essentially closed April about where they began the month. Each of the benchmark indexes listed here posted meager positive monthly gains over th ...

Holding Equities for the Long Term: Time vs. Timing

Legendary investor Warren Buffett is famous for his long-term perspective. He has said that he likes to make investments he would be comfortable holding even if the market shut down for 10 years. Investing with an eye to the long term is particularly important with stocks. Historically, equities have typically outperformed bonds, cash, and inflation, though past performance is no guarantee of future results and those returns also have involved higher volatility. It can be challenging to have Buffett-like patience during periods such as 2000-2002, when the stock market fell for 3 years in a row, or 2008, which was the worst year for the Standard & Poor's 500* since the Depression era. Times like those can frazzle the nerves of any investor, even the pros. With stocks, having an investing strategy is only half the battle; the other half is being able to stick to it. Just what is long term? Your own definition of "long term" is most important, and will depend in part on your individ ...

Quarterly Market Review: January-March 2018

The Markets (as of market close March 29, 2018) The first quarter of 2018 began as the fourth quarter of 2017 ended: with strong market gains. The Nasdaq led the way by the end of January, posting a monthly increase of almost 7.40%, followed by the large caps of the Dow (5.79%) and the S&P 500 (5.62%). The employment sector remained strong, with 239,000 new jobs added in January and average hourly earnings climbing 0.3%. Consumer prices rose 0.5% in January, while personal income increased 0.4%. The trade gap continued to widen, which has proven to be a focal point of the current administration. Nevertheless, consumer confidence in the economy increased in January with expectations for continued strengthening in the coming months. Volatility returned to the stock market in February, with each of the benchmark indexes listed here posting notable losses from the prior month. Nasdaq, while down, fared better than the large caps of both the S&P 500 and the Dow. Investor concerns over rising inflatio ...

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Disclosure

All First Bank blog information and content is strictly informational. It is not intended to be specific investment, tax, or legal advice. If you need detailed financial, investment, or tax advice, please contact a First Bank qualified professional. Please note, First Bank occasionally shares third-party content we find to be relevant and helpful to our audiences.