July 2018 Financial Markets Summary

Once every four years, sports fans around the globe turn their attention to the famous FIFA World Cup.  As the teams square off in the elimination rounds held in Russia, we look to this stage to learn a few valuable investment lessons.

Surprises – Expect the unexpected.  If we back up to mid-June before the first match, the top five favorites in Vegas were Brazil, Germany, Spain, France and Argentina.  Now as of July 1st, only three of these teams remain in the chase for the World Cup.  The defending champs from Germany didn’t even make it to the elimination round of 16.  Surprises have not only taken place in this year’s World Cup, but also in global stocks markets.  Few investors expected Russia to be the top performing country over the last 12 months or for consumer staples to be the worst performing sector.  Few also expected growth stocks to outperform value stocks by almost 20% over the past year.  Some would attempt to chase the returns of these recent winners, but history would suggest to maintain the course with your allocation.

Spacing and Balance – As we watch a match, we quickly realize the importance of proper spacing throughout the field.  The teams with appropriate spacing and balance of players between strikers, mid-fielders, defenders and the goal keeper have much higher probabilities to be in it until the end.  This is also consistent with investment portfolios as we maintain balance between aggressive and defensive asset classes.  Pairing aggressive stocks and defensive bonds across the globe can help provide profits in good times and help preserve those profits in poor environments.

Disputes – The players, coaches and fans seem to always be quarreling with one another.  This causes tensions to rise which potentially lead to yellow or even red cards.  This is also taking place in the world economic stage today with potential trade war disputes.  This has caused volatility to spike in markets, but we hope cooler heads prevail and no red cards are issued.

We hope these lessons can be used in the future to meet your GOOOOOOOOOAAAAAAAALS!

Asset Index Category Category Category 5-Year 10-Year
3 Months 2018 YTD Average Average
S&P 500 Index – Large Companies 2.9%  1.6% 11.1% 7.8%
S&P 400 Index – Mid-Size Companies 3.8%  2.7% 11.0% 9.0%
Russell 2000 Index – Small Companies 7.5% 7.0% 10.9% 9.0%
MSCI ACWI – Global (U.S. & Intl. Stocks) 0.7% -0.2% 9.6% 6.1%
MSCI EAFE Index – Developed Intl. -1.2% -2.7% 6.4% 2.8%
MSCI EM Index – Emerging Markets -7.9% -6.6% 5.0% 2.3%
Short-Term Corporate Bonds 0.3% 0.0% 1.3% 2.3%
Multi-Sector Bonds -0.2% -1.6% 2.2% 3.7%
International Government Bonds -4.7% -0.3% 1.3% 1.9%
Bloomberg Commodity Index 0.4% 0.0% -6.4% -9.0%
Dow Jones U.S. Real Estate 7.7% 1.4% 8.6% 7.7%


Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment, strategy, or product or any non-investment related content, made reference to directly or indirectly in this newsletter, will be suitable for your individual situation, or prove successful. This material is distributed by PDS Planning, Inc. and is for information purposes only.  Although information has been obtained from and is based upon sources PDS Planning believes to be reliable, we do not guarantee its accuracy.  It is provided with the understanding that no fiduciary relationship exists because of this report.  Opinions expressed in this report are not necessarily the opinions of PDS Planning and are subject to change without notice.  PDS Planning assumes no liability for the interpretation or use of this report. Consultation with a qualified investment advisor is recommended prior to executing any investment strategy. No portion of this publication should be construed as legal or accounting advice.  If you are a client of PDS Planning, please remember to contact PDS Planning, Inc., in writing, if there are any changes in your personal/financial situation or investment objectives.  All rights reserved.