A year in review: How 2018 Impacted our finances and investments

  • Interest rates have continued to tick upward. For our investments that means we saw bond prices go down some. The interest we receive off of many of those bond investments though will likely continue to trend up. This also means our own borrowing prices continued to increase too (mortgage and credit card interest rates). 
  • U.S Stocks ended down, and with more volatility that we’ve become accustomed to in the last few years! Much have this has been driven by trade tensions and geopolitical factors. 
  • Most international equity markets underperformed the U.S by several percentage points.   
  • The US Dollar has for the most part continued to appreciate against most foreign currencies which means that the goods we buy from overseas or travel abroad has likely been getting cheaper for us (our dollar buys more).
  • The labor market continued to strengthen as we saw unemployment continue to decline slightly, and wages growing. It goes without saying that this is helpful to working “savers” out there since this gives them more to save.
  • Oil and gas prices: Oil (WTI) is finishing the year below were we were last year but the gasoline that fuels our cars hasn’t seen much change year over year. 
  • Tax changes this year were significant to some but for many of us though the jury is still out on how we’ll be affected. 
  • And finally, for those of you holding collectible precious metals, prices end 2018 not far from where they began.

 

2019: So, What Could Lie Ahead? 

Each new year brings hope, anticipation and with it an element of uncertainty.  Here is what I’m reading about things we could see in 2019: 

Economic Outlook: The U.S economy is expected to see growth but the rate of that growth may slow.* 

  • Interest rates: Expected to continue to modestly move upward as the Federal Reserve may continue to tighten gradually.*
  • Inflation: We may see little change with it hovering around 2%*
  • Investments: Expect more volatility and see below for a link to a great infographic that goes deeper on the investment outlook in 2019.**

 

Because these economic, political and market driven factors will always change. To give yourself the best chance of success with your finances in the long run, consider making 2019 THE year that you create (or update) your financial blueprint. This blueprint will help you control the things you can control, learn more about those you can’t and at the end of the day enable you to make more informed decisions about your finances as you go. 

We at LOTUS are happily here to assist you if you need it on your journey.

We wish you a happy and prosperous 2019!

If you’d like to read a more in-depth analysis, you can read more detail in these documents that I’ve referenced above:

*JP Morgan investment outlook for 2019:

https://am.jpmorgan.com/us/en/asset-management/gim/adv/insights/investment-outlook-for-2019

**Love pictures?  Check out this infographic from JP Morgan

https://am.jpmorgan.com/blob-gim/1383595723070/83456/US_Investment_Outlook_infographic.pdf?segment=AMERICAS_US_ADV&locale=en_US

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