Comstock's magazine 0219 - February 2019 - Page 72

FINANCIAL SERVICES Given the highs and lows from last year, many investors are wondering which com- panies will be able to weather the market and still produce good returns. To answer that question, as well as offer addition- al insights and perspectives for the year ahead, Comstock’s convened responses from some of the top investment experts based in the Capital Region: Tom Chandler, Financial Advisor and Managing Director for The Chandler Group; Dianna Laney, Wealth Manager and Chartered Financial Consultant with Ideal Life Financial Advi- sors; Colin Grahl, Private Wealth Advisor for Westlake, Grahl, and Glover; and Kelly Brothers, Financial Advisor and Partner at Genovese Burford & Brothers. WHAT ARE SOME INVESTMENT TRENDS YOU ARE CURRENTLY SEEING? Grahl: One of the biggest trends I am see- ing is to pare back on growth-at-all-cost strategies such as FANGMAN stocks: Facebook, Amazon, Netflix, Google, Micro- soft, Apple and Nvidia. Instead, I am see- ing investors settling into more diversified portfolios that are in line with risk toler- ance. Additionally, I’m seeing some oppor- tunistic trends developing in oil, emerging markets and bonds. Laney: Improvements in technology will continue to have a strong effect on efficien- cies in the marketplace. Brothers: Investors have had to re-ac- climate to market volatility; 2017 was an unusual year because positive returns occurred in most asset classes with very few pullbacks. But now, rougher seas have returned, and we are still getting our ‘sea legs’ back. WHAT ECONOMIC FORCES ARE DRIVING INVESTMENTS FOR 2019? HOW DOES THIS DIFFER FROM THE PAST? Laney: The trade tariff negotiations with China, the Federal Reserve’s interest rate 72 | February 2019 increases and shifts in consumer behaviors are the forces driving the short-term vola- tility in the market. Compared to the last several years, we did not have a battle, or at least not at this level. The good news is that unemployment remains low, and the hous- ing market is very strong. Because of this, we do have a solid economic foundation, but at the same time there are still a fair amount of trends shifting in our economy. Chandler: Over time, the growth in corpo- rate earnings is what drives stock prices. In 2018, we saw some exceptional growth in earnings due in large part to the Tax Cuts and Jobs Act of 2017. The challenge for 2019 will be in sustaining the pace set in 2018 considering the growing trade ten- sions between the United States and Chi- na. Additionally, the Federal Reserve could unintentionally slow the economy if they make too many interest rate hikes. Grahl: While trade and interest rates con- tinue to dominate headlines, I believe that behind the scenes both jobs and inflation are the primary forces driving investments. As long as jobs, coupled with wage growth, continue to provide consumers with con- fidence, and inflation doesn’t eat up the growth in wages, I expect corporate earn- ings to continue to expand and push equity markets higher. WHAT CAN INVESTORS DO NOW TO PLAN AND PREPARE FOR THE FUTURE? Chandler: In my opinion, most investors don’t understand risk and therefore can’t recognize it. I would suggest reassessing your risk tolerance, and reviewing how much downside potential your current in- vestments might hold for you. Once you understand your risk tolerance, you can allocate your assets accordingly. Look at your asset allocation among stocks, bonds, alternatives and cash to determine if rebal- ancing your portfolio is appropriate. Look for any glaring risk in your holdings, or an over concentration to any one sector.