Preview of the 2018 Q3 Quarterly Market Report


Our Chief Investment Officer, Eric Cramer, gives a brief 2018 second quarter recap and an overview of the markets going into the third quarter for 2018.

Thanks for listening today. Please join us for one of several upcoming BIP 2018 Quarterly Market Report presentations.


JULY 25 AT 12:00PM
JULY 31 AT 12:00PM
AUGUST 16 AT 12:00PM
JULY 26 AT 12:00PM
AUGUST 22 AT 12:00PM


AUGUST 14 AT 12:00 PM


Equity investors have really been spoiled for the past two and a half years.  The last month that the MSCI ACWI IMI Net Global Equity index was down more than 5% in a month was in January of 2016, when it lost 6.27%.

But volatility has been low for nearly a decade.  If we look at all the months since March of 2009, when the recovery from the Great Recession started, we can’t even find a double-digit loss; the worst month was a 9.76% loss in September of 2011.  But the next month the market was up 10.83%, so investors quickly forgot about it.  This is in sharp contrast to what happened in 2008, when eight of twelve months were down months, and October gave us a loss of 20.22%.

Returns have been quite high for nearly a decade.   During the 112 months from March of 2009 through June of 2018, global equities have been positive 66% of the months, and the average monthly return has been a whopping 1.18%.   That’s an arithmetic average, not a geometric average, for the math geeks out there.  That rate of return, after adjusting for a very modest rate of inflation, is about double the long-term average.

Any disciplined investor, who still had a portfolio to work after the credit crisis, has felt the relief of watching those brokerage account statements post higher and higher numbers.   At some point, should we be looking to pull our chips off the table?  Perhaps, and a good financial plan will let you know if it makes sense for you to do that.  But keep in mind that, with interest rates still very low, the penalty for being safe is still a rate of return that may not keep up with the rate of inflation.

Our analysis shows that there are a multitude of ways to prepare for more volatility without going to cash.  We’re releasing our new 20-year market forecasts this month, as well as an analysis of the optimal ways to combine different portfolio strategies to suit almost any investor’s situation.  Soon we will be sending out our updated forecasts in the BIP Wealth Financial Planning Agreement, and we will give you a sneak preview in our 2018 Q3 Quarterly Market Report.

Thanks for listening today.  This is Eric Cramer, Chief Investment Officer at BIP Wealth.  Goodbye for now and I look forward to seeing you at one of our upcoming Quarterly Market Report lunches, or on the webcast.

Disclosure:  This communication contains general investing information that is not suitable for everyone and is subject to change without notice.  Past performance is no guarantee of future results and there is no guarantee that any views and opinions expressed will come to pass.  The information contained herein should not be construed as personalized investment advice, tax advice, or financial planning advice, and should not be considered a solicitation to buy or sell any security.  Investing in the stock market and the bond market involves gains and losses and may not be suitable for all investors.  The Global Equity index is the MSCI ACWI IMI Index, which is a free float-adjusted market capitalization weighted global index selected as the best available proxy for a diversified stock portfolio consistent with modern portfolio theory.  Approximately 55% of the index is comprised of the U.S. stock market and 45% is comprised of international stock markets, including both developed and emerging countries.  The “Net Total Return” version of the index is reported here, which means the index reinvests dividends after the deduction of withholding taxes, using a tax rate applicable to non‐resident institutional investors who do not benefit from double taxation treaties. The Emerging Market index is the MSCI Emerging Markets Gross Index.  The U.S. Fixed Income index is the Bloomberg Barclays Capital U.S. Aggregate Bond Index, which is a broad-based benchmark selected as the best available proxy for a high quality, diversified fixed income portfolio suitable for a U.S. investor.  It is comprised of the Barclays Capital U.S. Government/Credit Bond Index, the Mortgage-Backed Securities Indices, and the Asset-Backed Securities Index.  It is an unmanaged market value-weighted performance benchmark for investment-grade fixed-rate debt issues, with maturities of at least one year, and an outstanding par value of at least $100 million.  The “Total Return” version of the index is reported here, which means that dividends are included and reinvested. The Dow Jones Industrial Average (DJIA) is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange (NYSE) and the NASDAQ.  It is not possible to invest directly in this or any other index.