Celebrating our 30th Year


LW Client Newsletter 5 11 2018 Image.jpg

Stock Market Volatility Returns

Mid-Year Update 2018

The Economy & Global Markets

In the first quarter of 2018, three of the largest economies, U.S., China, and Europe experienced growth in employment, manufacturing, and business investment; U.S. gross domestic product hit an all‐time high with corporate profits accelerating to record heights and Europe exceeded the U.S. in 2017[I]. The U.S. economy grew near 3% in the prior twelve months as of 3/31/2018[ii], while U.S. corporate earnings are projected to increase by 18% in 2018 and Europe expects 11% earnings growth this year[iii].

The International Monetary Fund (IMF) in April released its forecast for global economic growth; world‐wide real GDP at 3.9% versus 3.8% in 2017, with the Euro‐Zone real GDP rising from 2.3% in 2017 to 2.4% in 2018[iv]. Even Great Britain, despite voting to leave the European Union in June 2016, had a strong 2017 with record highs in new orders for manufacturing and citizens working, and income inequality reaching a 30 year low despite predictions of economic collapse after the Brexit vote[v].

In the U.S. retail sales are up a robust 4.5% from a year ago[vi], housing starts (multi‐family and single‐family homes) are up 10.9% from a year ago[vii] and new single‐family home sales are up 8.8% form a year ago[viii].  Existing home sales are down slightly from the prior year though mostly from tight inventories of available homes as demand remains strong with the average home selling in about 3 ½ months, well below historical averages[ix]. Durable goods orders have increased by a healthy 9.5% over the prior 12 months[x]. The first quarter real GDP report revealed that for the second quarter in a row, every major component of business investment was positive: equipment, commercial construction, and intellectual property[xi].

Despite an apparent positive economic outlook, after hitting an all‐time high on January 26th of this year, the Dow Jones Industrial Average tumbled more than 10% into correction territory and has been in a tight trading range ever since, currently down 1.8% for the year and 8.8% from the all‐time highs[xii]. Sentiment changed quickly, although economic fundamentals appear to still be in place[xiii]. The S&P500 index had 23days with swings of 1% or more in the first quarter verses just 8 days with swings of 1% or more in all 2017[xiv]. In 2017, the S&P500 did not register a single down month of total return, while in the prior nine years we had no less than two months each year of negative total return and as many as eight[xv].

Political uncertainty over the Mueller investigation and mid‐term elections, inflation, higher interest rates, potential trade tariffs and speculation that the current global expansion may lose momentum are all factors that may have contributed to the current lull. Additionally, Congress increased discretionary, non-entitlement spending by $300 billion over the next two years, and now federal spending is set to rise 10% per year which could negate some of the benefits of tax cuts and deregulation[xvi]. Keep in mind, every dollar of government spending needs to be taxed or borrowed from the private sector, thus crowding out potential growth[xvii].


The U.S. jobless rate fell in April to 3.9%, hitting a low not seen in seventeen years; further, the economy has added jobs in every month since October 2010 while the U.S. economic expansion has now continued for 107 consecutive months, ranking it 2nd all‐time[xviii]. Industrial production in the U.S. has increased 4.4% during the past year, the most since 2011[xix]. Most notable though is that all eighteen service sector industries reported growth in April, highlighting continued expansion[xx]. Private sector wages, growing at an annual rate 4.3% during the past 6 months, should help to boost consumer purchasing power; consumer spending is up 4.4% during the prior 12 months[xxi]. There are roughly as many job openings as there are unemployed workers (6.5 million) in the U.S. presently[xxii].

Foreign Policy

Geopolitical risks with ISIS and North Korea appear to be diminishing; Arab and Kurdish militias backed by U.S. Special Forces crushed ISIS in their capital city of Raqqa in Syria, effectively destroying the terrorist group. President Donald Trump and North Korea’s Kim Jong‐Un are expected to meet on June 12th to work out a peaceful agreement for the Korean Peninsula[xxiii]. However, Iran may fill the wildcard geopolitical risk going forward as tensions between the U.S. and Tehran have increased[xxiv].

Taxes & Stock Buybacks

The Tax Cuts & Jobs Act of 12/22/2017 lowered the federal corporate tax rate from 35% to 21% beginning in 2018. Further, it created special tax rates for foreign earnings repatriated to the U.S. and coupled with the historic cash levels held at most U.S. corporations, it is expected to substantially increase stock buybacks[xxv]. It is notable that U.S. corporate stock repurchases have been $158 billion in the first quarter of this year, marking this the biggest quarter since buyback records started being recorded in 1998[xxvi]. As an example, Apple Inc. has announced repatriation of more than $250 billion in cash overseas due to the new tax law[xxvii] and highlighted a $100 billion share buy‐back program when it announced earnings this quarter[xxviii].

Stock buybacks lower the number of shares outstanding and consequently increase earnings per share for shareholders[xxix]. Proponents argue that stock buybacks display management confidence in the value of their own stock, while opponents argue corporate funds could be better spent employee wage increases, acquisitions, equipment, and research & development[xxx]. Goldman Sachs estimates that share repurchases of S&P500 companies could reach $650 billion in 2018; at that rate of repurchase, Andrew Bary in a recent Barron’s article estimates a three percent increase in S&P 500 return calculated by dividing the buyback dollars by the cumulative market value of the S&P500 index[xxxi]


“The U.S. economy is hitting on all cylinders with robust government expenditures, consumer spending and business investment”, stated Mohamed El‐Erian recently on Fox Business’s Mornings with Maria, “but to get to the next leg up we need to begin the long‐awaited government infrastructure program”[xxxii]. Infrastructure is the underlying structure of a country and its economy needed to function efficiently infrastructure includes roads, bridges, dams, water and sewer systems, railways and subways, airports, natural gas and oil pipelines, electricity transmission lines, and harbors. The proposed Trump Administration Plan is targeted to create public and private partnerships to fund infrastructure, drawing heavily on private capital investment, with the additional objective to create quality jobs.


The price of oil, and subsequent increase in gas prices, are attributed to increased worldwide demand for oil after a long period of over‐supply, OPEC production cuts, the Venezuelan economic crisis and Middle‐East geopolitical risks including the tension between the U.S. and Iran[xxxiii]. Consequently, with the price of oil has advanced 12% this year[xxxiv] and has been good for U.S. oil producers[xxxv]. The price of oil (West Texas Intermediate) closed at $68.57 on 4/30/2018 and is now on par with the average price during the period of 2002‐201[7xxxvi]. U.S. crude oil production has increased 25% to 10.54 million barrels per day since 2016 and is expected to expand further to meet worldwide demand[xxxvii].

Interest Rates

The Federal Open Market Committee (FOMC) voted to maintain the federal funds target rate at between 1.50% and 1.75% at their May meeting which reinforces a gradual approach to increasing interest rates. Further, the FOMC stated job gains have been strong on average in recent months, inflation for items other than food an energy has moved close to their 2% target, and risks to economic outlook appear to be balanced[xxxviii]. Most economists believe based on this most recent economic backdrop that the FOMC will raise rates two more times this year and three more times next year[xxxix].

The FOMC has the power to move markets by their action, or in some cases their failure to act. Warren Buffett has famously stated “Everything in valuation gets back to interest rates”. In a study highlighted in a book “Invest with the Fed”, for the period 1966‐2016, the S&P500 returned 15.2% annually when rates were trending down and 5.8% when rates were trending up[xl]. Interest rates affect companies in two ways; first, rising rates increase borrowing costs and second, higher rates decrease demand for discretionary products[xli]. Bonds with higher interest rates affect the stock of companies in yet another way by offering a more competitive investment alternative with less risk[xlii] than stocks.

Inflation & Budget Deficits

The case for higher expected inflation, greater than the FOMC’s target of 2%, is based on several factors including an increase in the producer price index of more than 3% over the past year[xliii]. Plus, oil and gasoline prices have risen significantly this year. Additionally, although wages have risen modestly during the past year, the quest for quality workers in the current tight labor market may begin to inflate wages more rapidly. Lastly, the U.S. government deficit is expected to grow and, coupled with an increased consumer debt load, may act as a catalyst to push interest rates higher[xliv].

Low unemployment, as we now have, caused double‐digit inflation during 1970s and 1980s but FOMC member, Charles Evans of the Federal Reserve Bank of Chicago, cautioned that because of structural changes in the economy today we may not necessarily experience the same result, and as such, the FOMC may be more patient to make monetary policy adjustments. Further, the Trump Administration argues that deregulation and tax cuts should increase business investment and increase productivity providing growth, thus keeping inflation low[xlv].


The U.S. National Debt stands at $21.144 trillion dollars, or $64,526 for each of our 327 million citizens; plus, the States have another $1.177 trillion of debt outstanding[xlvi]. The U.S. government is projected to run a $12.4 trillion budget deficit over the next ten years as forecasted by the Congressional Budget Office on 4/9/2018. The service of the U.S. national debt is approximately 8% of the budget, but with rising interest rates and the projected debt growth, the percentage of the national budget allocated to debt service could more than double in just the next ten years to more than 18% of the national budget, thus crowding out other important priorities for the country[xlvii]. At the individual level, credit card debt has crept back to all-time highs as of February of this year totaling $1.03 trillion[xlviii]. In addition, 70% of students utilize student loans to fund all or part of their education, as total student loan debt in the U.S. has bloated to $1.4 trillion, or $27,975 per student on average[xlix].

Politics & the Mid‐Term Elections

In U.S. elections, stocks generally do better six months after a mid‐term election than they do six months before due to the uncertainty surrounding the outcome beforehand verses the certainty afterward, no matter the actual outcome[l]. It has been argued in a recent article by Marshall Shield, citing academic research spanning 100 years, that a correction during a mid‐term election year, in a non‐recessionary economic environment, may wind up being a favorable buying opportunity[li]. Bottom line forget the political drama and focus on the economic fundamentals.


U.S. Treasury Secretary Steven Mnuchin traveled to China last week opening talks to iron out a new trade agreement between two of the world’s largest economies. No formal agreement was reached, but all sides acknowledged reaching agreement on some issues, while significant differences still exist, and the parties established a working mechanism for further communication[lii]. Running a trade deficit means the U.S. buys more than it produces. Consequently, investors around the world place their savings in U.S. bonds resulting in a net cash inflow that offsets our trade deficit. In general, trade tariffs or tariffs on specific goods (steel and aluminum) are not good for the economy; they act as taxes and often are counter‐productive[liii]. Furthermore, free trade enhances our standard of living even if other countries don’t practice free trade. Tariffs act to raise prices with no benefit to producers or consumers, plus these recently proposed tariffs may act to negatively offset some of the recently passed tax benefits[liv]. In 2017, China exported $506 billion to the U.S., while we exported only $130 billion to China[lv].

With that said, China has married access to its markets with rules enabling the Chinese government to essentially steal trade secrets and intellectual property for its own state‐run companies. Additionally, a case for national security can be made, especially for steel and aluminum imports, because China is a potential military rival[lvi] and we need to be able to produce those metals domestically. President Trump’s proposed trade tariffs on steel and aluminum, as well as protection of intellectual property rights proposed against China hopefully will be used to negotiate better trade terms and not become permanent trade policy. The U.S. and China could both risk giving up standard of living by limiting trade between these two leading economies.


Our outlook for 2018 remains unchanged; U.S. corporate earnings have increased over the past year in anticipation of the new tax cuts, with the implied tax cut of deregulation, a relatively low inflationary and low interest rate environment. Although we expect that should continue to fuel profit growth for U.S. corporations, we are also looking abroad to the European, Asian and emerging markets for additional growth opportunities after a period of under‐performance. Major economies in the Euro‐zone, Japan, China, and Germany are experiencing early to mid‐cycle characteristics including accommodative central bank policy, housing increases, and economic expansion[lvii]. Emerging markets, such as India, China, Taiwan and Brazil are becoming more stable, are developing a sizeable middle class, and are less dependent on natural resources, making these opportunities more attractive[lviii].

Individual tax cuts, coupled with increased wage earnings, are expected to keep consumer spending at a healthy pace. Further, we expect the economy to experience some headwinds from political uncertainty, the increased price of oil, higher interest rates, increased inflation, potential trade tariffs and higher wage pressure. The energy and financial sectors, which have been slow to recover from 2007 levels, may offer potential for growth throughout the remainder of the year[lix].

What we are seeing is a domestic and global economy that is expanding, not contracting, with the main fear recently of inflation and higher interest rates due to that acceleration. At this point, faster growth and inflation are pushing interest rates up which we feel is a good sign[lx], but needs to be continually monitored. The bond market has not been rewarding investors for being savers for some time; the FOMC has artificially held short‐term rates low for too long, well below historical inflation rates, so higher interest rates are long over‐due and potentially good for savers[lxi]. Although a little inflation and a gradual rise in interest rates over time is deemed to be good for the economy, too much is cautionary—no one knows at this point how that will play out, and as such, short‐term caution has developed. Additionally, tariffs, otherwise known as trade taxes, can be counterproductive to capitalism creating uncertainty and volatility in the markets.

Our LW Portfolio Models deploy two investment methodologies at all times so we do not have to be predictors of market corrections, which is impossible to foresee precisely. First, we have a portion of the portfolio that is flexible and tactical to potentially take advantage of a momentum opportunity that is present, including safety if a defensive posture is justified. Second, we overweight each core position in the model with a value position (ex/ mid‐cap core coupled with mid‐cap value); the theory is that growth is overpriced and naturally over‐weights all core positions with growth and thus more expected volatility. By coupling a value position with the core holding, we believe this not only increases the dividend income coming into the portfolio, but also may help reduce overall volatility (risk). No strategy can eliminate all types of risk, but both strategies have academic research supporting the respective theory over long periods of time.

Timeless Investment Principles

Market declines are inevitable and do not last forever. We expect higher long‐term returns on stocks than we do from cash and bonds, and for that, we also expect greater volatility based on historical data. Over the past 116 years, market declines of 10% occur about once every 115 days[lxii]. The last time we experienced a pullback in the U.S. stock market of this magnitude (10% or greater), prior to February 2018, was in August 2015, and before that in October 2011[lxiii]. The average length of a 10% correction is about four months[lxiv] before prices begin to return to previous levels. Market declines of 15‐20% had occurred on average every 2‐4 years[lxv] during the prior 116 years. Declines can sometimes cause imprudent behavior by filling and consuming investors with dread and panic. History has shown that stock market declines are a normal part of the investment cycle. Market declines have varied in intensity and frequency, but the market has always recovered from declines. Although past results don’t guarantee future results, remembering that downturns have been temporary in the past may help quell fears[lxvi].

Short‐term market timing does not work. Short term market timing is the elusive “holy grail” or “fountain of youth” of investing—something you want very much, but that is very hard or impossible to get or achieve. If anyone could do it consistently—ell right before something goes down and buy right back before it goes back up—the rewards would be great, but typically investors end up with sub‐par performance due to the extreme difficulty with getting the short‐term timing (day trading) wrong[lxvii]. Dr. Horstmeyer, an assistant professor of finance at George Mason University, believes investors on average lose between one and two percentage points annually from market timing verses the average stated return of the investment on an annual basis[lxviii]. Although the Holy Grail or Fountain of Youth most likely does not exist, the benefits of a long‐term disciplined investment plan are compelling, but the generally higher returns associated with investing in stocks over the long‐term is dependent on sticking with your investment plan through both good and bad times in the markets. As a hypothetical example, if you stayed invested in the S&P500 index during the 20‐year period 1/1/1997 to 12/31/2016 you earned 7.68% annually assuming reinvestment of dividends; however, if you missed just the 10 best days in the market during that 20‐year period hoping to ride out some of the volatility, your annual return would have been reduced almost in half to 4.01%. If you missed just the 30 best days over that 20‐year period, your return was negative[lxix]. Obviously, past performance is not a guarantee of future results but numerous similar examples over different long‐term periods (20 years of more) reveal the same lesson that market timing could adversely affect your long‐term goals[lxx].

Diversification is important. After studying the most brilliant and successful minds in the investment field over the past 30 years—both past and present—the one vital and common lesson learned is that diversification through asset allocation works to mitigate volatility over the long‐term by diversifying into separate asset classes with varying correlation to one another. We were taught as youngsters by our parents and grandparents “don’t put all your eggs in one basket” which is a straight forward translation to allocate your investment capital into different asset classes within your portfolio. The idea is that they all don’t go up or down at the same time—nd this could not ring louder at this time. While this may not be the case on a day‐to‐day basis, a mix of different types of assets provides a smoother and more stable ride for your portfolio over the long‐term[lxxi]. However, investment disciplines do not work all the time in every economic environment. In fact, in a recent Bloomberg News article, it was argued that asset allocation in 2015 had one of the worst results in nearly 80 years with most major asset classes finishing the year with tepid results, with no asset class offering superior relative returns to lift the overall diversified asset allocation portfolio return[lxxii] so patience is essential with any investment discipline.

Our Gameplan

Our LW Portfolio Models are not immune to declines in global markets as we experienced in the 2008 financial crisis, or on “Brexit Friday” in June 2016, or even the most recent downturn in February of this year. We do not have a crystal ball nor do any of the market analysts and forecasters. Our belief is that our LW Portfolio Model construction has positioned us for potential resilience in this environment and has also positioned us to possibly take advantage of market mispricing. We see no need to change course, as the ancient buddish proverb states “If we are facing in the right direction, all we have to do is keep on walking”. We do not modify overall asset class allocation due to market corrections unless a fundamental change in the underlying outlook for the domestic or global economy has diminished or brightened verses our expectations. Stocks have increased since the election in 2016 without any noticeable volatility, so a pullback or correction is healthy and necessary for markets to advance. Pullbacks can be expected to last for a few months, and not weeks, as the greed present turns to fear and shakes out those investors who are not fundamentally based in their convictions.

Our Leshnak Wealth Portfolio Models are globally diversified and strategically constructed, with a tactical component and a bias for value which prescribes a requirement for dividend yield from our investment positions. In simple terms, we have investment positions in eight asset classes: domestic equities, foreign developed stocks, foreign emerging market equities, domestic bonds, foreign bonds, cash equivalents, commodities, and real estate. How much of each asset class (if any) we hold in the aforementioned asset classes is based on your unique risk tolerance, financial resources and personal goals and objectives. Moreover, we have a portion of each portfolio that is tactical and flexible. This allows the manager to move assets into the sector(s) that best fit current market conditions based on their investment methodology. Our portfolio construction has two other vital components—we want dividends from each position so no matter what markets are doing day to day, we still have dividend coming into the portfolio for income or to reinvest. Lastly, we add value positions in our allocation by coupling a value position to each core position which we believe puts us in the position of the “turtle”, in the proverbial tortoise verses the hare scenario, over the long‐term with equities.

As your financial fiduciary, the Leshnak Wealth team cares deeply about your financial well‐being, and will monitor for rebalancing opportunities that may add value to your portfolio, or to be defensive as conditions might warrant. As always, please call with questions or if you wish to discuss your specific portfolio in greater detail.

–Bob Leshnak, May 11, 2018

The investment decisions are those of Robert M. Leshnak, Jr., CLU, ChFC, CFP®, MS, EA as of 5/11/2018 and are subject to change. The information contained herein is only intended for Leshnak Wealth clients invested in the Leshnak Wealth Portfolio Models. No forecasts or recommendations are guaranteed. The technical data utilized as part of the investment decisions does not guarantee future positive results. Performance, especially for short periods of time, should not be the sole factor in making investment decisions. The information contained herein does not constitute client specific investment advice or take into account a specific client’s particular investment objectives, strategies, tax status, resources, or investment time horizon. No investment strategy such as asset allocation, diversification, tactically overweighting sectors, or utilizing fundamental and technical analysis can always assure a profit, nor always protect against a loss. The information presented is not intended to be a substitute for specific individualized tax, legal, or financial planning advice. The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time. Investing involves risks in regards to all of the investment products mentioned in this commentary, including the potential loss of principal. International investing involves additional risks including risks associated to foreign currency, limited liquidity, government regulation, and the possibility of substantial volatility due to adverse political, economic, and other developments. The two main risks associated with fixed income investing are interest rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers to the possibility that the insurer of the bond will not be able to make principal and interest payments. Investments in commodities may entail significant risks and can be significantly affected by events such as variations in the commodities markets, weather, disease, embargoes, international, political, and economic developments, the success of exploration projects, tax and other government regulations, as well as other factors. Indexes are unmanaged and investors are not able to invest directly into any index. Past performance is no guarantee of future results. Please note that individual situations can vary. Therefore, the information presented here should only be relied upon when coordinated with individual professional advice.

i Cote, Douglas and Cananaugh, Karyn, “The Economy and markets Unleashed in 2018”; Voya Global Perspectives Market Outlook 2Q18.

ii Wesbury, Brian S. and Stein, Robert, “The First Estimate for Q1 Real GDP Growth is 2.3% at an Annual Rate”; First Trust Advisors-Data Watch, 4/27/2018.

iii Cote, Douglas and Cananaugh, Karyn, “The Economy and markets Unleashed in 2018”; Voya Global Perspectives Market Outlook 2Q18.

iv “A Snapshot of European Equities”; First Trust, 4/19/2018.

v Nelson, Fraser, “The U.K. Is Doing Just Fine, Thanks”; The Wall Street Journal, March 24-25, 2018.

vi Wesbury, Brian S. and Stein, Robert, “Retail Sales Rose 0.6% in March”; First Trust Advisors-Data Watch, 4/16/2018.

vii Wesbury, Brian S. and Stein, Robert, “Housing Starts Increased 1.9% in March”; First Trust Advisors-Data Watch, 4/27/2018.

viii Wesbury, Brian S. and Stein, Robert, “New Single Family Home Sales Increased 4% in March”; First Trust Advisors-Data Watch, 4/24/2018.

ix Wesbury, Brian S. and Stein, Robert, “Existing Home Sales Increased 1.1% in March”; First Trust Advisors-Data Watch, 4/23/2018.

x Wesbury, Brian S. and Stein, Robert, “New Orders for Durable Goods Rose 2.6% in March”; First Trust Advisors-Data Watch, 4/26/2018.

xi Wesbury, Brian S. and Stein, Robert, “The First Estimate for Q1 Real GDP Growth is 2.3% at an Annual Rate”; First Trust Advisors-Data Watch, 4/27/2018.

xii Otani, Akane and Wursthorn, Michael, “Markets Run Fast Only to Stay in Place”; The Wall Street Journal, May 7, 2018.

xiii Wesbury, Brian S. and Stein, Robert, “This is Just a Correction”; First Trust Advisors 2/9/2018.

xiv “2Q18: Volatility Makes a Comeback”; Hartford Funds. The 5-Minute Forecast 5/3/2018.

xv “Every Year Looks Volatile Compared to 2017”; First Trust 4/26/2018.

xvi Wesbury, Brian S. and Stein, Robert, “Snatching Slow Growth from the Jaws of Fast Growth”; First Trust Advisors- Monday Morning Outlook, 2/12/2018.

xvii Wesbury, Brian S. and Stein, Robert, “Snatching Slow Growth from the Jaws of Fast Growth”; First Trust Advisors- Monday Morning Outlook, 2/12/2018.

xviiixviii Mitchell, Josh, “Jovless Rate at 17-Year Low”; WSJ Weekend, May 5-6, 2018.

xix Wesbury, Brian S. and Stein, Robert, “Industrial Production Rose 0.5% in March”; First Trust Advisors-Data Watch, 4/17/2018.

xx Wesbury, Brian S. and Stein, Robert, “The ISM Non-Manufacturing Index Declined to 56.8 in April”; First Trust Advisors-Data Watch, 5/3/2018.

xxi Wesbury, Brian S. and Stein, Robert, “Personal Income Rose 0.3% in March”; First Trust Advisors-Data Watch, 4/30/2018.

xxii Morath, Eric, “For Unemployed, Now Is a Good Time to Get Hired”; The Wall Street Journal, May 9, 2018.

xxiii Cote, Douglas and Cananaugh, Karyn, “The Economy and markets Unleashed in 2018”; Voya Global Perspectives Market Outlook 2Q18.

xxivxxiv Bender, Michael and Gordon, Michael, and Ballhaus, “Trump Pulls U.S. Out of Iran Deal”; The Wall Street Journal, May 9, 2018.

xxvxxv “Stock buybacks are expected to rise markedly thanks to tax reform”; First Trust 4/17/2018.

xxvi Eisen, Ben and Otani, Akane, “Buybacks Surge, Steadying Market”; The Wall Street Journal, May 11, 2018.

xxvii Wakabayashi, Daisuke and Chen, Brian X., “Apple, Capitalizing on New Tax Law, Plans to Bring Billions in Cash Back to U.S.”; NY Times, 1/17/2018.

xxviii Apple’s Q2 2018 earnings call, 5/1/2018.

xxixxxix Eisen, Ben and Otani, Akane, “Buybacks Surge, Steadying Market”; The Wall Street Journal, May 11, 2018.

xxx Eisen, Ben and Otani, Akane, “Buybacks Surge, Steadying Market”; The Wall Street Journal, May 11, 2018.

xxxi Bary, Andrew, “The Buyback Boom”; Barron’s, May 14, 2018 (received on 5/11/2018).

xxxii El-Erian, Mohamed A. “Live Interview on Mornings with Maria”; Fox Business Chanel, 5/9/2018.

xxxiii Turnill, Richard, “How to Play the Oil Rally”; Blackrock Advisors Global Weekly Commentary, May 7, 2018

xxxiv Sider, Alison and Kantchev, Georgi, “Forecaster Fail: Missing Oil’s Rise”; The Wall Street Journal, May 7, 2018.

xxxv “China Trade: Short Visit, Long-Distance”; Legg Mason Global Asset Management, May 4, 2018.

xxxvi “The Price of Crude Oil has Risen to an Interesting Level”; First Trust 5/1/2018.

xxxvii “The Price of Crude Oil has Risen to an Interesting Level”; First Trust 5/1/2018.

xxxviii “As expected, rates left unchanged as inflation moves closer to a “Symmetric” target”; Pacific Asset Management, 5/3/18.

xxxix Tankersley, Jim, “Fed Officials Worry the Economy Is Too Good. Workers Still Feel Left Behind”; NY Times, April 26, 2018.

xl Johnson, Robert and Jensen, Gerald and Garcia-Feijoo, Luis, “Invest with the Fed-Maximize Portfolio Performance by following Federal Reserve Policy”; McGraw-Hill, 2/20/2015.

xli Johnson, Robert and Jensen, Gerald and Garcia-Feijoo, Luis, “Invest with the Fed-Maximize Portfolio Performance by following Federal Reserve Policy”; McGraw-Hill, 2/20/2015.

xliixlii Turnill, Richard, “The 3% yield that really matters”; Blackrock Advisors Global Weekly Commentary, 4/30/2018.

xliii Wesbury, Brian S. and Stein, Robert, “The Producer Price Index Increased 0.3% in March”; First Trust Advisors-Data Watch, 4/10/2018.

xliv Derrick, James R., Jr., “Inflation Shock May Be Next”; SFS Portfolios April 2018 MarketPoint Commentary, 4/13/2018.

xlv Tankersley, Jim, “Fed Officials Worry the Economy Is Too Good. Workers Still Feel Left Behind”; NY Times, April 26, 2018.

xlvi USDebtClock.org

xlviixlvii Hooper, Kristina, “Assesing the road ahead after a turbulent first quarter”; Q2 Market Outlook: Five Things to Watch in April, Invesco Advisor Perspectives, 4/4/2018.

xlviii By the Numbers; April 16, 2018.

xlixxlix “Student Land Debt Statistics 2018”; The Student Loan Report; 3/2/2018. https://studentloans.net

l Hulbert, Mark, “Why Stocks Can’t Wait for the Midterms to be Over”; The Wall Street Journal, May 7, 2018.

li Shield, Marshall, “Use the Correction as a Buying Opportunity: 40% upside?”; Proactive Advisor Magazine 4/18/2018.

lii “China Trade: Short Visit, Long-Distance”; Legg Mason Global Asset Management, May 4, 2018.

liii Wesbury, Brian S. and Stein, Robert, “Thoughts on Trade”; First Trust Advisors-Monday Morning Outlook, 4/16/2018.

liv Wesbury, Brian S. and Stein, Robert, “Harleys, Bourbon & Denim”; First Trust Advisors-Monday Morning Outlook, 3/5/2018.

lv Wesbury, Brian S. and Stein, Robert, “Thoughts on Trade”; First Trust Advisors-Monday Morning Outlook, 4/16/2018.

lvi Wesbury, Brian S. and Stein, Robert, “Thoughts on Trade”; First Trust Advisors-Monday Morning Outlook, 4/16/2018.

lvii “But US assets have gotten expensive”; Capital Group Outlook-Time for Balance and Flexibility, January 2018.

lviii “But US assets have gotten expensive”; Capital Group Outlook-Time for Balance and Flexibility, January 2018.

lix “But US assets have gotten expensive”; Capital Group Outlook-Time for Balance and Flexibility, January 2018.

lx Wesbury, Brian S. and Stein, Robert, “3%-Why it Doesn’t Matter”; First Trust Advisors-Monday Morning Outlook, 4/30/2018.

lxi Wesbury, Brian S. and Stein, Robert, “A Generation of Interest Rate Illiterates”; First Trust Advisors-Monday Morning Outlook, 4/9/2018.

lxii “Keys to Prevailing Through Stock Market Declines”; American Funds Investor Resource: A Guide to Market Fluctuations; Aug. 2015; americanfunds.com

lxiii “Keys to Prevailing Through Stock Market Declines”; American Funds Investor Resource: A Guide to Market Fluctuations; Aug. 2015; americanfunds.com

lxiv “Keys to Prevailing Through Stock Market Declines”; American Funds Investor Resource: A Guide to Market Fluctuations; Aug. 2015; americanfunds.com

lxv “Declines Have Become Common and Temporary Occurrences”; American Funds Client Conversations; Jan. 2016

lxvi “Keys to Prevailing Through Stock Market Declines”; American Funds Investor Resource: A Guide to Market Fluctuations; Aug. 2015; americanfunds.com

lxvii Vanguard Principles for Investing Success; 2014, pages 29-32; vanguard.com

lxviii Horstmeyer, Derek, “Caught in the Return Gap”; The Wall Street Journal, May 7, 2018.

lxixlxix “Five Things You Need ot Know to Ride Out a Volatile Sock Market”; Franklin Templeton Investments, Sept 2017.

lxx “Market Volatility-Managing the Ups and Downs”; Fidelity Investments, March 2017.

lxxi Vanguard Principles for Investing Success; 2014, pages 8-16; vanguard.com

lxxii “The Year that Stocks, Bonds and Cash Failed to Thrive”, Investment News, January 4, 2016.