Dear Towerpoint,


What a crazy couple of weeks for the stock market. Volatility has seemingly replaced complacency as the "new norm" for investors so far in 2018, and a very volatile March punctuated what was a difficult (but not horrible) first quarter.


Investors cheered as the Dow Jones Industrial Average (the Dow) closed at a record high of 26,616.71 on January 26, but the celebrating was short-lived. Inflation concerns, the possibility of swiftly increasing interest rates, and worries about a global trade war fueled a dramatic two week pullback, and by February 8, the the Dow had declined almost 3,000 (!) points, closing at 23,860.46. March had its fair share of ups and downs as well, with the Nasdaq having its worst month in more than two years. As the markets and the quarter drew to a close yesterday (major stock markets are closed today for Good Friday), the Dow (-2.5%) and the S&P 500 (-1.2%) experienced quarterly declines.


These 1Q, 2018 declines in the Dow and the S&P 500 ended a nine-quarter streak of gains in both indexes, which for the Dow marked its longest streak since 1997. And, almost 40% of the market value created during the Trump rally is now gone (source: Bespoke Investment Group):



Time will tell whether this quarterly pullback represents a fundamental change in the economic and market trend, or simply a temporary hiccup in the extended nine-year advance and expansion we have continued to enjoy.


Most successful investors understand that the media's depiction of the stock market as if it were a casino is narrow and simplistic, and they do not get very excited, nor worried, about these inevitable month-to-month and quarter-to-quarter movements. In fact, successful investors expect this volatility to occur. We cannot help ourselves in quoting Warren Buffett:



And oftentimes lost in this short-term scrutiny is the importance and predictability of the income generated by one's investments and portfolio. The compounding effect of owning investments that pay, in cold hard cash, both dividends and interest, cannot be overstated. Knowing that their nest egg continues to compound, independent of what the market and the economy are doing, has helped many a Towerpoint Wealth client sleep much better at night. 


After using the word "madness" last week, "folly" seems to be another appropriate noun to use when describing the world we live in, and the last two weeks have been very eventful:

Lastly, we encourage you to take three or four minutes to review the curated content found below, highlighted by:

  • Photos of our initial "chalk walk" as we prepare for the big upcoming move into our brand new offices on the 10th floor of the Bank of the West building at 500 Capitol Mall. Click HERE to see more on our Facebook page.
  • Speaking of Facebook, and in light of their huge privacy breach, the slide below discussing what to do (or not do) if you have an account is very interesting.
  • The date for our next Lunch & LearnTax-Free Investing, has changed from April 10 to April 12. Click HERE to RSVP.

The world is complicated. We encourage you to call (916-405-9140) email (info@towerpointwealth.com) or Tweet (@twrpointwealth) us with any concerns, questions, or needs you have - we are here for you, and look forward to connecting with, helping, and being a direct, fully independent, and no-strings-attached expert financial resource for each of you.


- Joseph and the Towerpoint Wealth team

 
 
 
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