As the broader equity markets have reached record levels, a question people often ask us is, “When is the market going to crash?” Nobody can predict the future specifically, but there are two things we can tell you:

1. If your assets are properly allocated, we believe regular (and expected) pullbacks in the broader markets should not impact your lifestyle or income.
2. Market drops are a normal part of long-term growth, and we believe it is not a matter of if the markets will correct but when.

With all the negative news about the current administration, the status of Obamacare, North Korea, Russian collusion in the election and a plethora of other things, it’s easy to miss much of the positive news and economic data. Let’s celebrate some positive trends.

1. Jobs ¾ According to CNN Money on May 5, the unemployment rate hit a 10-year low of 4.4 percent in April. Even the so-called underemployment rate, a number some consider the “real” unemployment rate because it includes people working part-time who want full-time jobs, fell to 8.8 percent in April. That is the lowest since November 2007.

Other numbers point to a healthier labor market, too. For example, 522,000 jobs were added in the first three full months after President Trump took office. Wages have risen 2.5 percent in the past 12 months. That’s still below the 3 percent level the president, the Fed and many workers would like to see, but it’s a big improvement from just 2 percent since the 2008 recession ended.

2. Housing ¾ For many Americans, the bulk of their wealth is tied up in their homes. There’s good news on that front.

• Sold quickly: An existing home that was sold in the United States in June 2017 was on the market before sale for just 28 days, on average (source: National Association of Realtors).
• Median price increases: According to a May 2017 press release from the National Association of Realtors, the median price for an existing home for the first quarter of 2017 was $232,100 -¾ up 6.9 percent from the first quarter of 2016. This is the fastest growth since the second quarter of 2015. The press release noted that “the strongest quarterly sales pace in exactly a decade put significant downward pressure on inventory levels and caused price growth to further accelerate.”

3. The stock market ¾ The stock market has continued to move up, reaching record levels.

• S&P gains through July: The S&P 500 was up 11.6 percent YTD (total return) through July 31, 2017, representing nine consecutive months of gains. The last time the S&P 500 was up in each of the first seven months of a year was 1995 (22 years ago), a full year that produced 11 of 12 “up” months and a +37.6 percent gain for the entire year (source: BTN Research).
• DJIA gains through July: From the November election through July 31^st, the Dow Jones Industrial Average market was up more than 18 percent. This increase is being driven by more than perception. As of July 28^th, 73 percent of the S&P 500 companies that reported earnings had topped estimates on both the top and bottom lines, according to data from FactSet.

4. Consumer confidence ¾ From a psychological standpoint, nearly 6 in 10 people in the United States (58 percent) say the economic situation is very or somewhat good, according to a new Pew Research Center survey conducted between February 16^th and March 15^th of this year. Last spring, only 44 percent of the American public described the economy as” good.” This is the most positive assessment of U.S. economic conditions since 2007 and only the second time that half or more of those surveyed have given the economy a thumbs up.
5. Expansion of the global middle class ¾ Finally, from a global perspective, we are living through the third greatest expansion of the global middle class since 1800. By 2030, the middle class is expected to expand by another three billion people, with this growth coming almost exclusively from the emerging world (source: brookings.edu, 2/28/17).

Again, we believe it is not a case of if the markets will pull back, but a case of when. We also believe that if you are properly positioned, these events should not impact your ability to take income or maintain your lifestyle.

In fact, these events may present an opportunity to add to your portfolio. The key is a proactive approach to rebalancing your portfolio and taking a holistic approach to planning, which includes managing both expenses and income tax. We do not believe in trying to time markets. There will always be uncertainty, and we are in the middle of a very interesting time in which the negative news appears to be overshadowing the positive. We believe this situation presents an opportunity for those who can rise above the noise and a potential risk for those who can’t.

We will be challenged with rising inflation, longer life spans and increased information. The key is to work with a trusted advisor who can help you navigate a course to achieving your personal goals and vision. Please contact us, without cost or obligation, to discuss your situation.  Randy Carver at  randy.carver@raymondjames.com or (440) 974-0808.

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Randy Carver and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.  There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. Past performance is not a guarantee of future results.  Investing involves risk and you may incur a profit or loss regardless of strategy selected. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.

When we book an airline ticket we want to get from where we are to our destination as quickly and easily as possible with the least amount of cost and hassle.   We understand that some airlines include things like checked bags whereas some do not and that there are different routes we can take based on our schedule, budget and destination.   Ultimately we expect all airlines to get us to the destination safely and that they meet basic mandated guidelines.  For example the airline is expected to inspect and maintain the aircraft based on FAA guidelines.

The pilot will check the plane for mechanical issues, before departing but we understand he did not build the plane and that things may come up that are unforeseen.   There may be weather issues that cause delays or a change in routing.   We understand that delays that are related to the weather, or due to a mechanical issue,  are beyond the control of the pilot or airline.  What we expect is that they safely get us to our destination as efficiently as possible given the challenges and events that come up.

The same things are true with your financial planning. You are hiring your advisor and his or her firm to get you from where you are to a financial destination as quickly and easily as possible with the least amount of cost and hassle. The route you take will be based your needs, schedule and ultimate destination (goals).   It is very important to understand that the advisor did not build the investments being used to get you to where you are going,  just as the pilot did not build the plane.  While the advisor has done their due diligence (pre-flight inspection) unforeseen events may occur.   For example a fund manager may leave or an investment strategy may change.  There may be a natural disaster or terrorist event that impacts markets in general and therefore portfolios.   This is not the fault of the advisor (pilot).  Their job is to identify the problem, notify you and then act accordingly to get you to your ultimate destination as safely and close to schedule as possible.    We plan for what is expected and also for contingencies when emergencies occur as part of our proactive process.    When something does arise our role is to deal with it and get you to your destination as safely as possible.  This is also where an experienced flight crew or financial advisory team can make a difference.

When selecting the airline, or even private charter, there are dozens of choices; just as there are with financial firms and advisors.  Some discount airlines provide bare-bones service but often have other fees such as for carry-on bags, selecting a seat or checked bags that are included with a full service airline.   Understanding what the fees are and what you can expect from the airline is key.  The same is true of your financial advisor.  Understating what the cost to work with them is, and what you can expect in return is important.   Moreover, if you book a first class ticket or private charter you will receive perks that you will not get with a discount airline.

We generally utilize a flat fee based approach for clients based on assets managed.  We believe this provides the most transparency about what you are paying and also the most flexibility to make adjustments when unforeseen issues arise.   This approach allows you to make changes or get cash without penalty or transaction expense.

We will design a custom route based upon your specific goals, needs, risk tolerance and overall vision. We have developed and refined a process to work with you in developing, implementing and monitoring a plan this is based on your vision.  We then utilize a proactive approach to managing income, taxes and other factors that are important to you.  Please feel free to contact us, without cost or obligation, to discuss any questions you may have.  Safe travels!

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Randy Carver and not necessarily those of RJFS or Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Investing involves risk and investors can incur a profit or loss regardless of strategy selected. You should discuss any tax or legal matters with the appropriate professional.  In a fee-based account clients pay a quarterly fee, based on the level of assets in the account, for the services of a financial advisor as part of an advisory relationship. In deciding to pay a fee rather than commissions, clients should understand that the fee may be higher than a commission alternative during periods of lower trading. Advisory fees are in addition to the internal expenses charged by mutual funds and other investment company securities. To the extent that clients intend to hold these securities, the internal expenses should be included when evaluating the costs of a fee-based account. Clients should periodically re-evaluate whether the use of an asset-based fee continues to be appropriate in servicing their needs. A list of additional considerations, as well as the fee schedule, is available in the firm’s Form ADV Part II as well as the client agreement.