Second Quarter 2019 Market Report

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Second Quarter 2019 Market Report

Object in Motion

Anyone who has taken a high school physics class remembers Sir Isaac Newton’s First Law of Motion. To paraphrase: an object in motion stays in motion unless acted upon by an outside force. Although Newton was describing physical objects like planets and the heavens, the same basic concept is true for the economy and markets.

Over the past century, the U.S. economy has spent most of the time expanding. When recessions did occur, it was not because the expansion died of old age or simply ran out of steam. Rather, recessions had a cause. Importantly, those causes are not present today, even as the expansion is set to become the longest on record. This gives us confidence that the economy will continue to grow and drive further gains for stocks. The main risk to this optimistic outlook is that the trade war with China knocks the economy off course.

Newton had another famous law – the Second Law of Thermodynamics – which states that the universe moves over time from order to disorder. Just the opposite is true for the economy. Since the beginning of history, people have sought to improve their lives. Entrepreneurs, in turn, have sought to profit by creating goods and services to satisfy peoples’ wants and needs. Over the centuries, these activities became increasingly coordinated and eventually gave rise to the modern economy and financial markets. By owning stocks, investors can harness these perennial forces to generate wealth. This is why we believe in owning stocks for the long run despite the ever-present uncertainty faced by investors.

In this quarter’s report, we review market performance, suggest how investors should navigate the trade war, and provide reasons for our optimistic outlook for the remainder of 2019.

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DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.

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Hefren-Tillotson Inc. is a leading diversified financial services firm providing investment and retirement plan management and comprehensive, financial planning through MASTERPLAN® for individuals and businesses. The firm’s wealth management services are administered by Certified Financial Planner (CFP) professionals, Chartered Financial Analyst (CFA) Charter holders, attorneys, Chartered Life Underwriters, and CPA/PFS’s. Hefren-Tillotson offers corporate services including 401(k) retirement planning, executive financial counseling, fiduciary reviews and workplace financial planning seminars. Founded in 1948, the firm is headquartered in Pittsburgh and has offices located in Pittsburgh, Butler, Greensburg, North Hills, and South Hills. MEMBER SIPC.