2017 was one of the least volatile years in recent memory, with the largest stock market pullback being a mere -3%. However, according to HCR Wealth Advisors, a registered investment advisory (RIA) firm, 2018 likely will not be as stable. Volatility may stem from a sharp rise in bond yields, a geopolitical event, a policy shift in China or another unforeseen event.
Nevertheless, HCR Wealth Advisors is not worried about another downturn. In fact, the firm believes that 2018 will be another strong year for both the US and Global economy. In the United States specifically, both consumer confidence and home sales have reached new highs for the decade. Furthermore, HCR Wealth Advisors thinks that “synchronized global recovery” will take effect because of extremely growth friendly central banks throughout the world. Because of this, HCR Wealth Advisors expects the Federal Reserve to consistently raise rates in 2018 as well as 2019 so long as the economy remains stable.
HCR Wealth Advisors manages over $1 billion for clients and cultivates independent thought among its advisors to allow for the creation of personalized financial strategies for clients. HCR Wealth Advisors’ mission is “to establish life-long relationships with our clients through education, trust, communication, and, most of all, service.”
Additionally, HCR Wealth Advisors see a potential spike in bond yields. In the past few years, bond yields have remained relatively subdued because of low inflationary pressures. However, bond yields are now approaching highs of 2.60% which has not been seen since the aftermath of the 2016 election. Meanwhile, the stock market has generated solid but not stellar returns in this timeframe. Still, HCR Wealth Advisors believes that the stock market has room to grow in the coming years because of strong earnings growth. In 2017, earnings within the S&P 500 grew by 18% and earnings are projected to grow another 17% in 2018. This aging bull market will likely increasingly attract wary investors sitting on the sidelines to equity funds according to @HCRwealth.
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