Risk Managed Strategy Funds

Market News Q & A with Kevin Miller

April 16, 2018

Q: Why do you think the markets remained strong despite a volatile year? 

A: The markets started off 2017 very strong based on the anticipation of what the future holds for regulations, taxes, etc.  As the year continued, the positive impact of an altered regulatory environment was beginning to impact the earnings for corporations thereby sustaining markets climb.  Lastly, the passing of Tax Reform in Q4 gave it the energy to finish on a positive note for the year.

 

Q: What kind of returns should investors anticipate in the coming year? 

A: Seldom can anyone correctly predict future performance due to the mirade of elements that go into the actual performance over time.  I anticipate the fixed income markets to be mixed based on the assumption the Federal Reserve will continue to raise interest rates throughout 2018.  I anticipate both the domestic equity market and foreign equity market will continue to perform at an above average level throughout 2018.

 

Q: Should inflation be a concern for retirees or those about to retire?

A: Inflation is always an issue for anyone living of the interest income from fixed investments.  Typically, it is very challenging for fixed income investors to keep pace with inflation in a period of rising interest rates.  Investors in today’s market may need to supplement their fixed income returns with investments carrying a slightly higher level of volatility, i.e. dividend paying large cap domestic stocks, or credit based fixed income investments (high yield, bank loans, etc.).

 

Q: Will the presidential election have a longer-term effect on the markets? 

A: Every presidential election impacts the markets based on the policies and perspectives they initiate.  The changes thus far by this administration have been very favorable toward businesses in the United States, therefore have the potential of providing sustainable, and meaningful, changes for several years into the future.

 

Q: What are the chances of tax reform going through next year?

A: 100%

 

Q: How did the failure of the Affordable Care Act (ACA) repeal impact health care on the investing level?

A: Until the ACA program, and its future, has been solidified from a cost/benefit perspective, investing in health care will need to be done on a very active basis with the proper due diligence performed on every holding.

 

 Q: What about the upcoming 2018 midterm elections and potential market impact?

A: It will be interesting how everyone will respond to the anticipated “pay increase” in February after the new income tax structure is in place.  The midterm elections will be influenced by the number of programs Congress can pass on a bi-partisan basis between now and October, 2018.

 

Q: Should investors be concerned about geopolitical strife?

A: Yes, but to varying degrees.  There will probably always be some form of geopolitical strife in our world.  Accepting that as a possibility, investor’s today need to be cognizant of its severity and disruptive impact on global leaders.  Geopolitical strife encompassing greater severity and disruption on developed economies will have a much more significant impact on global markets.