Teach Your Parents

I try my best to keep a positive attitude about most things and look at every big question and challenge as a glass half-full opportunity. The event in Florida that took the lives of seventeen people poses once again the question of appropriate gun laws and steps to curb the ease of obtaining assault rifles. My hope is that the high school students that are talking and setting up events to wake up people like me and Congress to the absurd laws we have today in this country will start a groundswell of action to make common sense changes that can save lives in the future. Sadly, I am not optimistic that anything meaningful will change due to the money and power of the NRA. I bet if mothers and grandmothers were in charge of Congress and the NRA changes would be made tomorrow. What do you think?

Stocks bounced back nicely last week from the crazy, volatility led correction the week before. Most stock indexes were up 4% or more last week as investors started making a few timid steps to reengage into stock positions of their favorite companies. Investors were keen to grab a few shares of their favorite bank stock with interest rates approaching the much talked about 3% threshold for the 10 year U.S. government bond. It appears the new Fed chairman will have a real balancing act in 2018, keeping interest rates low with an expanding economy and a large debt buildup needed to be financed. From the stock market perspective we need to see rising rates happen in a gradual fashion. Any surge in interest rates will not be taken kindly by stock investors as higher bond yields will create more competition for investors’ dollars. Remember it is the pace of rising rates that throws investors into a tizzy fit not the actual level of rates.

I continue to see many good opportunities for investment but believe a careful approach is still warranted with volatility likely to stick around as we go through the year. I plan to take advantage of opportunities in technology, healthcare, and industrial stocks as the economy and service needs continue to create long term trends that are investable for our dollars.

Have a great week and hug your children,

Roger N. Steed

February 20, 2018

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