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July, 2017 Review and Outlook

By August 3, 2017September 16th, 2023No Comments

Highlights of this Month’s Review:

  1. Be sure to know all your options before filing for Social Security! Call us first to help!
  2. Call now to schedule your mid-year review if you have not yet done so!
  3. Stock indices continued to move higher in July, interest rates were flat in general.
  4. We continue to favor long term fixed income moving forward in our allocations.
  5. Economy continues to move ahead-albeit slowly
  6. We don’t see a recession in the near term.


Social Security Planning:

If you have not elected how and when to start taking your Social Security, let us assist in providing you details as to your options prior to your decision.  We have the ability to provide you with a personal report comparing your various options and ages and the differences to you for the long term.  Don’t make this important decision without first exploring all your options.  We are here to help!

 Summer is Winding Down:

It’s hard to believe but summer is already winding down and school is about to start and has started already in some areas.  If you have not done so, call today to set up your mid-year review before this quarter slips away!  We want to review the first half of 2017 with you, update your personal planning, and review your estate plan this quarter.  Call to schedule your in-office meeting or a “Go-to-Meeting” online with the convenience of a review wherever you are with a computer, tablet, or smartphone!  Don’t let the third quarter go by without your personal review.

 The Markets:

July saw continued gains for the major U.S. stock indices, with the Dow Jones Industrial Average rising 2.54% and the Standard & Poor’s 500 gaining 1.93% for the month. (MarketWatch) Within these indices, however, it has been a mixed bag as to which individual stocks have moved higher vs. lower.  With the Dow consisting of only 30 stocks, and being a price-weighted index, a higher priced stock has a much greater influence on its movement, up or down, than does a lower priced stock.

Interest rates in general remained fairly flat in July with the yield for the 10 year U.S. Treasury ending at 2.30%, down .04 for the month.  This compares to 2.45% at the start of this year. (U.S. Treasury) The general range for a 30-year fixed-rate mortgage is now 3.75-4.283%, depending on the lender.  15-year fixed mortgage rates now stand at 2.875-3.00%. (

The price of oil jumped $3.60 per barrel for West Texas Intermediate Crude, ending July at $50.17 per barrel.  Gold closed the month at $1,267.55 per ounce. (CNBC)

We continue to expect intermediate to long term interest rates to remain flat to down for the coming months, and have kept portfolios positioned across all risk levels to take advantage of this should it occur.  We did decrease the overall exposure to stocks/equities over the past several months for all portfolios based on our outlook, giving favor to longer term maturity bond funds compared to short-term funds and/or equities.  We still maintain stock exposure across our stock models, and hold individual equity issues within each model based on risk.  So far this strategy has fared well relative to risk, and we can adjust allocations if warranted moving forward.  We will keep you posted.

 The Economy:

Most are familiar with the Aesop’s Fable, The Tortoise and the Hare. It’s a story that teaches that a slow, steady, and deliberate pace ultimately produces success. Without a doubt, the current economic expansion has been slow and steady. There are many drawbacks to its dull pace, but it has one silver lining – longevity.

That brings us to the National Bureau of Economic Research (NBER).  The NBER is the official arbiter of economic recessions and economic recoveries (also called expansions). The organization bases its decision on complex models that take employment, manufacturing, income, and retail and business sales into account.

The current economic expansion just entered its ninth year. Put another way, it just turned eight years old. How do we know? The NBER marked the end of what we now call the Great Recession as of June 2009.

As Figure 1 highlights, the current expansion is the third longest since WWII, and we’re not far from moving into second place, which brings up a natural question. Is a recession lurking just around the corner?

It’s an impossible question to answer with certainty, as the brightest economic minds have historically done a poor job of calling turning points in the business cycle. Still, expansions don’t die of old age. They usually come to an end because speculative excesses build up in the economy, such as the tech/telecom boom of the 1990s or the housing bubble in the 2000s.

Or, the Fed cuts off the expansion via rate hikes. The shortest recovery, which lasted only one year, experienced an early demise when then Fed Chairman Paul Volker hiked interest rates in an effort to end years of high inflation. His recipe worked, but the cost was steep – a lengthy and deep recession.

While accurately forecasting the next recession is problematic at best, we can look to leading economic indicators for clues. And most leading indicators aren’t flashing red, suggesting a near-term recession is unlikely. It’s not that cracks in the economic foundation haven’t appeared, but the lackluster recovery has helped prevent most speculative excesses from building in the economy. We don’t see a recession in the near-term at this point in time.

For investors, recessions and recoveries matter. Recessions are closely tied to bear markets, or declines in excess of 20%. Why? Longer term, stocks march to the tune of corporate profit growth, and nothing stymies profit growth and expectations of profit growth more than a recession.

We have had only one bear market since the mid-1960s that was not tied to a recession – the one-day Crash in October of 1987. The 22% decline in the mid-1960s, mild by bear standards, correlated with a sharp slowdown in the economy, though a recession did not ensue.

We can conclude that a recession will inevitably ensue, and we can reasonably conclude the economy will exit that recession. It’s been a pattern we’ve witnessed for over 200 years. We can’t say with certainty we’ll sidestep a 20% selloff absent a recession, but over 50 years of data suggest the odds we’ll experience a bear market outside of a recession are low.

We do see 10%+ selloffs from time to time (four since the bull market began per St. Louis Federal Reserve data), but the belief economic growth would continue prevented a more serious decline.

Based on the historical data, we can say that a steady and deliberate plan, i.e., one that does not change due to short-term emotional reactions that inevitably envelope investor psychology, enables investors to more effectively reach their long-term investment goals.

If you have any questions or thoughts, please feel free to reach out to us at any time.  We appreciate the privilege to be of service.

God Bless,

Your TEAM at F.I.G. Financial Services, Inc.



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Stocks and bonds and commodities are not FDIC insured and can fall in value, and any investment information, securities and commodities mentioned in this report may not be suitable for everyone.

U.S. Treasury bonds and Treasury bills are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.

Past performance is not a guarantee of future performance. Different investments involve different degrees of risk, and there can be no assurance that the future performance of any investment, security, commodity or investment strategy that is referenced will be profitable or be suitable for your portfolio.
The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.

Before making any investments or making any type of investment decision, please consult with your financial advisor and determine how a security may fit into your investment portfolio, how a decision may affect your financial position and how it may impact your financial goals.

All opinions are subject to change without notice in response to changing market and/or economic conditions.

1 The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly.  Past performance does not guarantee future results.

3 The S&P 500 Index is an unmanaged index of 500 larger companies which cannot be invested into directly.  Past performance does not guarantee future results.

5 New York Mercantile Exchange front-month contract; Prices can and do vary; past performance does not guarantee future results.

6 London Bullion Market Association; gold fixing pricing; Prices can and do vary; past performance does not guarantee future results.

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F.I.G. Financial
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Oklahoma City, OK 73134

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