1st Quarter 2019 Investment Newsletter

Economic and Market Overview

The 1st quarter of 2019 saw a broad-based stock market rally as interest rates declined.  While lower interest rates generally indicate anticipated economic weakness, this helped U.S. small cap and real estate stocks outperform.

After buying stocks to take advantage of several price declines in 2018, we have discussed with clients taking profit out of stocks in 2019 to capture some profits and be disciplined in maintaining target allocations.  Price/Earnings ratios of the S&P 500 are now a little higher than the historical average.  Anyone who was caught up in the emotion of the December decline and sold stocks would have missed a very steep rally in January and February.

Some economic risks have been resolved, such as the government shutdown, significantly reduced expectations for interest rate increases by the Fed, positive manufacturing data for both the U.S. and China at the end of the quarter, and indications from the White House that trade disputes with China will be resolved by early summer.  However other risks remain, such as the sometimes slightly negative yield curve indicating expectations for slowing economic growth in 2019 and 2020.

How to Avoid Common Medicare Enrollment Mistakes

  • Avoid the lifetime late enrollment penalty by starting the Medicare enrollment process 3 months before your 65th birthday.
    • Depending on the size of your employer, you may be able to delay Medicare enrollment without penalty if you continue working after age 65 and stay with your group health plan.  Note that COBRA coverage does not count as employer coverage and will not exempt you from late enrollment penalties.
  • Stop making contributions to your Health Savings Account 6 months prior to enrolling in Medicare.  Medicare Part A is not a high deductible health plan, a requirement for contributing to an HSA, and is retroactive for 6 months for those who qualify during these months.
  • If you’re on an Affordable Care Act plan, you should still begin the Medicare enrollment process 3 months before your 65th birthday.
  • Don’t assume that supplemental retiree health benefits will preclude you from enrolling in Medicare.  With retiree benefits, Medicare will be your primary insurance, so you should enroll in a timely manner.


We welcome and encourage your calls with questions, and sincerely appreciate both your business and referrals.


Market Index Returns QTR 1
S&P 500 (Large Cap)      13.7%
Russell 2000 (Small Cap)      14.6%
MSCI International Index      10.5%
MSCI Emerging Markets      10.0%
US REIT Index (Commercial Real Estate)      15.7%
DJ Commodity Index        6.3%
BofA 1-3 Year Corproate & Gov’t Bond Index       1.2%
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