Dear Friends,

With my half century mark on the horizon, I decided to try to get in better shape this year to fight the hands of time. I have always enjoyed running over the years and so I set my sights on training to run a marathon. My marathon race date is January 13 at Disney – I wanted to complete the race before tax season begins!

As I train, it strikes me that there are a lot of parallels between running a marathon and investing. To cover the distance of a marathon requires a steady and consistent pace. Investing requires that same consistency. There are certainly plenty of miles where you feel great and other miles where you feel terrible and want to give up. Investing is no different – there are times (like the 800-point drop on Tuesday) where you become frustrated and ready to throw in the towel. Other times, like the first half of 2017, everything is going smoothly, and you feel great.

Stopping and starting while running a distance only makes it harder to complete the race. With investing, getting in and out of the market is a sure way to undermine your investment performance. Running too fast or running too slow will also hurt your chances of completing a marathon. Similarly, if your investment allocation is too aggressive or too conservative, you will not achieve the investment results you desire.

With running, you really never know how that next mile will feel. Is something going to start to hurt? Are you going to be able to maintain your pace? Same with investing – we can’t predict the future. We can run the race, we can make sure our allocation is what it needs to be, and we can maintain consistency in our approach. Those are the things we can control. Beyond that is everything we can’t control. Of course, this is where the media comes in to highlight all those things that are simply beyond our control – effectively making things seem much worse than they ever actually are.

There have certainly been some tough miles in the market of late. The two main issues impacting the market are trade and interest rates. While I wish there was some magic and immediate resolution to these issues, it appears they will create much volatility in the weeks and months ahead. So, if you check your balances regularly, be sure to have a solid supply of antacid!

A new trade deal with China or a Federal Reserve simply slowing down its increases in interest rates would have a significant positive affect on the market. Last week, with mere comments by the Federal Reserve Chairman and a dinner meeting between the U.S. and China, the markets gained 1,250 points. This is the unpredictable nature of the markets and headlines in the short-term.  These headlines will pass just as they always do – we just don’t know when. Once resolved, the markets will continue on the same upward trend they have been on for the past 80 years.

In 2019, consumer and corporate spending and sentiment may very well carry the day over these trade and interest rate concerns. Regardless of how these issues play out, we believe our primary focus on large companies with a good balance between growth and value will produce the best possible results for your investment marathon.

We hope you have a Merry Christmas and a blessed New Year!