Heron Wealth Mid-Year Commentary & Panel Discussion with Liz Clayman - Asset.TV

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In June, US stocks reversed May’s 6.4% decline and rallied 7% to new all time highs, with the S&P 500 up 18.5% on the year. Half the gain is a reversal of the 5.0% decline in 2018, while the rest is a full year’s gain delivered in 6 months.

World markets in general are having a good year, and US bonds have rallied substantially since January. Full report here:

Regrettably, once again we have that “walking on thin ice” sensation, which we had prior to last fall’s near 20% correction.

David Edwards appeared on a panel discussion recently to discuss his outlook for the rest of the year.

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n brief:

  • We evaluate the stock market in terms of Red Light – Yellow Light – Green Light.

  • Right now stock market indicators are flashing yellow, which was the same condition last as last July, two months before the market sank 20%

  • Tariffs wars are leaning on world economy

  • Tariffs are selectively harming US farmers, certain manufacturers, lobster fisherman, though broader US economy as yet unscathed

  • Overall S&P 500 earnings, which are dependent on world growth, do not look great for 2019 (only 1.1% estimated by Zack’s)

  • 18% YTD gain in S&P 500 driven primary by stock buybacks, falling bond yields, which is extremely unhealthy

  • IPO issuance very strong this year, which also indicates a top

  • Stock market valuations are stretched, but not extreme

  • Huge rally in bonds this year driven by 25% risk of recession next year

  • Exploding US Federal debt leaves no ammunition to stimulate economy

  • Any forecast of the outcome of US presidential election at this time is worthless, creating enormous uncertainly among decision makers

We are not yanking money out of stocks, but for those clients with significant cash flow needs in the next 12 months, we are taking that money out of stocks now. New money we are investing only 1/3 to ½ now, waiting for more news or a significant pullback to invest the rest.

About David Edwards
David Edwards is president and founder of Heron Wealth, which provides financial planning NYC, investment advice and estate planning services to individuals and families across the United States and in Europe.

David graduated from Hamilton College with a concentration in History and Mathematics, and holds an MBA in General Management from Darden Graduate School of Business at the University of Virginia.

David contributed over 100 columns to TheStreet.com. He is quoted frequently in the press. David is a member of the Investment Adviser Association serving on the Legislation and Technology committees, and is an advisory board member for eMoney.

Prior to founding Heron Wealth, he was associated with Morgan Stanley, JP Morgan and Nomura Securities developing investment products and quantitative trading models.

David competes in sailing regattas from New England to the Caribbean and coaches a home town team in New York Harbor.

Direct: 347 580-5288


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