2018 Q1: Round trip to tax time

Posted by on Apr 15, 2018 in MFA Quarterly Commentaries

The First Quarter’s Round Trip

The global stock markets started the year off with a bang and by the end of the first quarter of 2018 they were back to a touch below where they started the year. After roaring up 6% to 8% in January, various global markets ended the quarter modestly down: U.S. stocks were down -0.61%, international stocks were down -1.18%. In the meantime, various bond market indices were also down slightly (flat to down about -1.5%).

Over the past 12 months, overall diversified returns were about where we would expect with a large variance in returns. Bonds were flat or down over the year ended March 31st, while stocks notched double digit gains.  Emerging Markets led the way gaining 20%1 over the last four quarters

This volatile round trip in market returns is not unusual and it is a normal part of investing – much more normal than the previous run of consistent positive returns. We know to expect that quarterly returns can vary widely. We continue to believe the US and other global economies are poised to deliver expected returns over time. Our portfolios remain on track with a solid strategy in place and appropriately diversified investments.

The Great Tax Team

If taxes are on your mind, you are in good company. The recent tax reform is bringing new questions as well as perhaps some anxiety and confusion around tax planning for 2018. We’d like to remind you that we are here to help and that we enjoy teaming up with your tax preparer to help you plan ahead and find clarity and calm around your tax planning.

As a starter, we would like to review your 2017 tax returns. The easiest way to do this is to have your tax preparer share a .pdf file with us. Having the tax return will help us to do proactive tax planning as we do our normal rebalancing during the year.  If an in-person tax review is not practical, we can also meet via telephone or by using our web conferencing technology.