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Navigating a Changing Financial Landscape: A Market Update

August 9, 2019

Listen to this important video market update and reach out at (858)597-1966 for your complimentary meeting with David Reyes.

In the ever-evolving world of finance, it's crucial to stay informed about market developments, especially when unexpected changes occur. Today, we'll delve into a recent market update, touching on essential topics that could impact your portfolio and retirement plans.

Federal Reserve's Rate Cut

In a move that hasn't been witnessed for over a decade, the Federal Reserve recently lowered interest rates by 25 basis points, reducing the rate from approximately two and a half percent to two and a quarter percent. This marks the first interest rate cut since 2008, a period of financial turmoil that still resonates in our memories.

Historically, the Federal Reserve typically cuts rates when economic growth begins to slow down. The last two instances of a first-rate cut by the Federal Reserve occurred in 2000 and 2008, both preceding significant market crashes. While it's not a guarantee that history will repeat itself, these occurrences serve as cautionary tales, reminding us to remain vigilant.

Currently, there is about a 60% chance that the Federal Reserve will reduce rates further in the next six months by an additional 50 basis points. The global economy is showing signs of slowdown, with negative interest rates in various parts of the world, such as Germany, France, Denmark, and Japan. In some cases, individuals are required to pay fees to keep their money in banks. This worldwide trend is affecting interest rates in the United States.

The Bond Market's Surprising Rally

Despite a relatively flat stock market over the past year, the bond market has experienced an impressive rally. Long-term Treasuries, in particular, have surged, with a 15% increase year-to-date. This rally highlights the stability and strength of the bond market, offering investors a less volatile alternative.

Additionally, gold has been on a remarkable upswing, making it another asset to consider in your investment strategy.

Protecting Your Portfolio

Given the uncertainty in the current market, caution is advised. It's not a time to be overly brave, as markets can be unpredictable. In the months of September, October, and November, historical patterns suggest potential downturns, with the possibility of a 10-20% market correction.

To navigate these uncertain waters and safeguard your portfolio while increasing your retirement income and reducing volatility, it's crucial to explore strategic financial planning options. If you're interested in learning more about how to protect your portfolio and enhance your retirement income, consider reaching out to a financial advisor for guidance.

In conclusion, the financial landscape is evolving, and it's essential to adapt your investment strategy accordingly. By staying informed and exploring diverse asset classes, you can navigate these challenges and work towards securing your financial future.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, consult with your financial advisor.
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