Broker Check

Manging the Extremes

| May 29, 2018
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As June quickly approaches we have already seen 90 and 100-degree temperatures over Memorial Day weekend. Tropical Storm Alberto has kicked off “storm season” a little early. Many of us saw winterish weather hang around into spring, only to see summer-like weather follow it in what seemed like two weeks. Does that mean we are in for an extreme weather year? That summer and storm season are going to be “Record Breaking?” Maybe, and maybe not. No more than one days 400-point drop in the market means the next recession is upon us.

At some point we are quite likely to set a new all-time high count for Tropical Storms and Hurricanes. If you internet search that topic you get pages of the high predictions for 2018 storm season and stories of the high destruction from 2017 storm season. Eventually a few pages in you can find an answer to the question of highest storm season ever, 2007 with 27 named storms. The hyperbole is huge. The same thing happens with the markets and economic reports, and expectations the “sky is falling” it has been to good for too long. Well just like the weather, maybe yes, maybe no. Eventually we will set a new record for volatility, but remember 2017 was just the opposite it was near record lows for volatility. Eventually we will have another recession, that only takes two quarters in a row of declining GDP. No, we have not seen that in nearly a decade now. So, odds are we might be getting close…if you only look at the “Time” factor. The reality is consumer confidence is high, home values are increasing, personal savings is increasing, consumption is rising, wages are rising, productivity is rising, and the economy for the last 8+ years has grown at a tortoise slow pace. Below 3% GDP growth, many said this was/is the “new normal” for economic growth. Turns out they were wrong; however, it has built what is a financially stable economic base by growing at a slower pace. So maybe it is time to set a record for the longest “bull market run” or expansion without a recession or whatever the journalist of the day wants to call it. And maybe, just maybe, every new pothole in the road is not the end of America’s infrastructure, it’s just a pothole, and someone will come along and fix it.

Have a great week, and feel free to share with family and friends.

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