Election years can be fraught with uncertainty as developments surrounding the candidates, their platforms, and their predicted effects on the economy and markets dominate the news. But should you let this stream of political information influence how you and Towneley manage your investment portfolio?

During the third quarter, the media released news of Warren Buffet’s two latest investment acquisitions. The billionaire’s investments do not always catch our attention, but this time it is different. Mr. Buffet seems concerned about the dollar’s weakness. He may also be worried about U.S. stock market valuations, which are at historic highs compared to those of some foreign stock markets.

As we head into the final quarter of 2019, we do so with some concern about recent fiscal and monetary policies being employed in the U.S. We discuss the potential pitfalls of Modern Monetary Theory in our Third Quarter Commentary that accompanies this letter.

The first half of the year saw strong market performance across all asset classes as client multi-asset portfolios have enjoyed positive returns.

Global equity markets made a V-shaped rebound, rallying throughout the first quarter as all asset classes earned positive first quarter returns (see quarterly market review).

After logging strong returns in 2017, global equity markets delivered negative returns in US dollar terms in 2018.

We consider the U.S. economy to be extremely strong with a very low probability of a recession in the near future. Gross domestic product (GDP) grew at an annual rate of 3.5% this past quarter.

The first half of 2018 has given us plenty of praiseworthy economic news. Consider the labor market: Unemployment has shrunk to a low we have not seen since a brief period in 2000.

As 2018 dawned, it seemed we might settle in for another year of records in the equities markets.