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Atlas Market Outlook – July 1st, 2019

Money Management Newsletter & More

Atlas Market Report

July 1st, 2019

Market Commentary (Key items you need to know):

  • Market Outlook by Ronald E. Lang
  • Additional Market Commentary by Allen B. Lang
  • Fun Links (always popular)
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Key items you need to know –

Never a dull moment from month to month. After a horrible May, we had a historic June. Why? What Happened? If you fell asleep from April 30th to June 30th, the S&P 500 Index is at the exact same levels. A lot of “E.K.G.” in there with your heart pumping. Many “defensive” areas of the market did well such as Utilities, Real Estate Investment Trusts, Staple Products and Water and Waste Management companies.
So whats next for the market. We just finished end of month, end of quarter and end of the first half of the year. The next three weeks will dictate the direction of the second half with corporate earnings reports and guidance. Many companies have guided “down” their earnings and guidance. This sets up for many earnings announcement beats (which obviously shouldn’t be surprises). The geopolitical headwinds will never end and seem to push the markets around when they get elevated. These are called “Headline Risks”. Most of the time the news reports are B.S.! What seemed bad (and made worse by the media) really wasn’t and the market corrected itself. What seemed positive (and the fire was fanned by the media) really wasn’t news at all or deals announced weren’t actually “done deals”. Very frustrating for investors, but another reason to bang the drum again to “not look at your account everyday or every week”. Review once per month or once per quarter. Unless something changes in a major way or you have specific investment questions, live a little and save yourself some heartache.
You may be saying, “Ron, it sounds like you are giving a sermon again”. If it does, great, it needs reinforcement. Everything we’ve seen and heard in the last 9-12 months will pale in comparison over the next 18 months. So if you had a tough time stomaching the market moves in the last 60 days, start buying the pharmaceutical stocks, you are going to purchasing a lot of medicine. We are all emotionally driven in life, there are ways to handle it and protect yourself.
Article on “Asset Protection” – CLICK HERE
Have you opened your Health-Savings Account (HSA) yet? If you don’t have one at work (or they don’t offer it), then you should open an Individual or a Family account. It allows you to put away $3,500 per year for an Individual (over 50 $1,000 catch-up) or $7,000 for a family. You can choose an amount to use for current year medical expenses and the balance for “long-term tax-free growth”. It is like a 401(k) for your long-term healthcare future expenses. The great thing about this is the money you put into a HSA is “Pre-Tax”, meaning you will get money back when you file. So its pre-tax money and you can determine a portion that grows tax-free and when you need the money for medical after the age of 65 you don’t have to pay taxes on it.
More Information on Opening a Health-Savings Account (HSA) – CLICK HERE
How to Invest in This Market
As we mentioned above, only look at your account statement for your portfolio once per month. Review your portfolio with your Investment Advisor at least twice per year. As we get closer to 2020 Presidential Election season the market will get more volatile. Since every investor is different on how they handle volatility, you need to make “gradual” moves quarterly leading into first and second quarter of 2020.
Re-Allocation and Diversification is the key to your future success and building wealth. Again, each investor is different so you need to assess your personal and family situation. If you don’t know how to do this, call your Investment Advisor or give us a call. Yes, this is a plug for Atlas, but making a minor mistake today, could be a major blunder in 12, 24 or more months down the road. If you don’t have the time to manage your money, you need to pay someone to do it.
In Summary
Summer is usually much slower in the markets, especially the entire month of August. Expect volatility because there is lower transaction volume so prices of stocks will get pushed around a lot more. Enjoy your summer and find some down time. Stress surrounds us all and if you aren’t mentally centered, everything you do will be slightly or significantly slanted then normal. Make sure you find time to spend with friends and family who you haven’t seen in a while (even the dysfunctional ones, come on, we all need comedic material). In the end, you can only count on the ones you love. Enjoy America’s Independence Day and know why we celebrate it!
Authored by
Ronald E. Lang, Principal
Atlas Wealth Management, LLC
Investment Advisors & Estate Planners
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Commentary by Allen B. Lang, Senior Portfolio Manager

Well Summer Is Here, What’s Next?
August 1st through the second week in September, historically, has been the vacation month for Wall Street. Volume drops off. Sometimes volatility picks up. But in the end, barring any major international news, when vacation is over, one looks back to see nothing really happened in six weeks.
The markets have hit, or nearly, hit new highs in May and June. Regardless of what happens through the middle of September, I am confident that the markets will be at higher levels by year end. We have been on the cautious side for a while and our basic strategy hasn’t changed.
It is very important to put in “stop orders” below the current market prices to protect profits already gained (on paper). There’s always time to get back into securities that were sold. Yes, there may very well be taxes to pay, but as the old saying goes, “Show me someone who doesn’t pay taxes, and I’ll show you someone who doesn’t have any assets”. You can help off-set gains by selling securities in which you have losses. (Buying back those securities requires a 31 day wait period, while selling securities for a profit can be repurchased immediately). If you don’t understand this tax strategy, give us a call.
OK, let’s talk interest rates. Boring? Yes? Important to understand? YES!  
As I have said too often, the Fed was too late in raising rates after the Housing Bubble burst in 2008. There was times in 2012, 2013 and 2014 to raise rates ¼% a couple of times each year, as employment picked up, business began increasing sales both domestically and internationally.
The first increase in rates was a POSITIVE, not a negative. It showed that corporations were borrowing money for infrastructure and the economy was getting strong. That raise and a few subsequent raises 
only told us things were moving in a positive fashion, economically. 
Then came 2018.
The Fed erred drastically. Raising rates four(4) times was not warranted at all. Inflation was not running amok, domestic and international sales were increasing at a sustainable rate, unemployment was going lower. A raise of .25%(1/4) twice in 2018 was more than enough. Four raises sent the wrong message, not only to the markets, but to the nation. It sounded like inflation was too high and our GDP (Gross National Product) was increasing at too fast a pace. That was not the case. I never understood the explanations by the Fed as to their reasoning. 
Now there’s talk about lowering rates by .25%(1/4) to .50%(1/2). Here again, this is giving us a unreasonable impression as to where our economy is and where it’s heading. Lowering rates says to me and indicates our economy is both not doing well and the lowering of rates will have a positive impact. 
Nothing can be further then the truth. There are times when lowering rates is positive an when lowering rates is negative. The same goes for the increase in rates, there are times when it is positive and times when it is negative.
My suggestion is leave them where they are. Give it another year to see IF inflation rises, If unemployment goes up, If GDP goes down. There’s plenty of time to do the right thing and no rush to do it.
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