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Year-End Tasks & December 2019 Market Update

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David Hicks and Ryan Gilmore provide an update on December's market performance and identify several important year-end financial tasks.

Fee based financial planning and investment advisory services are offered through Oakmont Advisory Group, LLC, a Registered Investment Advisor in the State of New Mexico. Insurance products and services are offered through Oakmont Insurance, LLC. Oakmont Advisory Group, LLC and Oakmont Insurance, LLC are affiliated companies.

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Year-End Tasks & December 2019 Market Update

  1. 1. Market Update David Hicks, Investment Advisor Ryan Gilmore, Investment Advisor
  2. 2. The Agenda 1. Market Overview 2. Two Big Things to Watch in 2020 3. End of Year Items Visit our NEW website at www.oakmontadvisory.com
  3. 3. San Francisco Fed President, Mary Daly "I don't think we're headed towards a recession right now. When I look at the data coming in, I see solid domestic momentum that points to a continued economic expansion. The labor market is strong, consumer confidence is high, and consumer spending is healthy. But considerable headwinds, like weaker global growth and trade uncertainties, have emerged - and they're contributing to this fear we see in the markets that a downturn is right around the corner. So one thing I'm looking closely at is whether the mood gets so out of sync with the data that the fear of recession becomes a self-fulfilling prophecy." - Sept 6th, 2019 https://www.inc.com/quora/is-us-headed-for-recession-heres-what-data-says.html Visit our NEW website at www.oakmontadvisory.com
  4. 4. 2019 Market Update 1. Asset classes have generally trended “North” 2. US / China Trade has been the primary driver 3. US Treasury “10s-2s spread” contracting, then expanding Visit our NEW website at www.oakmontadvisory.com
  5. 5. Key Indicators Relative Strength Index (RSI) Relative strength index is a technical indicator used to determine if an asset class is moving toward an overbought/overvalued condition. An asset class is deemed to be overbought/overvalued once the RSI approaches a level of 70. Approaching an RSI level of 70 or higher indicates an asset class is a good candidate for a pullback or downturn. Moving Average Crossover Moving Average Crossover occurs when an asset class’ short-term moving average crosses above or below its long term moving average. The two most common moving average time frames used in crossover analysis are the 50-day moving average and the 200-day moving average. A Death Cross occurs when an asset class’ 50-day moving average crosses below its 200-day moving average. Conversely a Golden Cross occurs when an asset class’ 50-day moving average crosses above its 200-day moving average. Moving Average Convergence/Divergence (MACD) MACD is a trend-following momentum indicator showing the relationship between two moving averages. The MACD is calculated by subtracting the 26-day exponential moving average from its 12-day exponential day moving average. The result is MACD. Next, a 9-day moving average of the MACD is used to develop a trend or signal line. When the MACD falls below the signal line, it’s a bearish signal. When the MACD rises above the signal line, it’s a bullish signal. Visit our NEW website at www.oakmontadvisory.com
  6. 6. SP500 Bull + Bear Indicators Visit our NEW website at www.oakmontadvisory.com
  7. 7. AGG Bull + Bear Indicators Visit our NEW website at www.oakmontadvisory.com
  8. 8. Two Big Things to Watch in 2020 • The US/China Trade Talks – Phase One is already priced into the market – Progress is seemingly inevitable, but how much and how quickly remains uncertain – Any negative fall out would have massive ripple effects (as it already has) throughout global markets Visit our NEW website at www.oakmontadvisory.com
  9. 9. Two Big Things to Watch in 2020 • 2020 Democratic Primaries (and the General Election) – Kick off in Iowa February 3rd, with Super Tuesday a month later – The Democratic National Convention – A moderate-leaning nominee would have less of a negative market impact than a far-left leaning nominee. Visit our NEW website at www.oakmontadvisory.com
  10. 10. Year End Items! • Required Minimum Distributions – Those who have turned 70.5 this year or older • Inherited IRAs and Inherited Roth IRAs are included here – Need to be taken by 12/31 • Requests need to be received by 12/18 to ensure completion – Qualified Charitable Distributions. Visit our NEW website at www.oakmontadvisory.com
  11. 11. • Qualified Charitable Distributions (QCD) – If you are over 70.5 years, and give regularly to charities, you may want to consider setting up a QCD. – Satisfies all (or part) or RMD – Reduces taxable income IRA / RMD Charity Year End Items Visit our NEW website at www.oakmontadvisory.com You 1040
  12. 12. Year End Items! • Roth IRA Conversions – If you are interested in learning about how to take advantage of the Tax Cuts & Jobs Act’s (TCJA) higher Standard Deduction to reposition tax- deferred assets, let’s chat! Visit our NEW website at www.oakmontadvisory.com
  13. 13. Year End Items! • 2019 401(k) Contributions – If you are planning on maxing out your 2019 contributions, you have until 12/31 • under 50 = $19,000 – $19,500 in 2020 • Over 50 = $25,000 ($19,000 + $6,000 catch-up) – $26,000 in 2020 • 2019 IRA and Roth contribution deadline is Wednesday, April 15th, 2020 Visit our NEW website at www.oakmontadvisory.com
  14. 14. Year End Items • Review your monthly/annual budget figures and adjust where necessary for 2020
  15. 15. Oakmont Website Be sure to visit our New + Improved website! Notification of new content alert 1. Blog updates 2. Radio + Podcasts 3. Event announcements www.oakmontadvisory.com
  16. 16. Need help? 505-821-6966 David@oakmontadvisory.com
  17. 17. Disclosure • Fee-based financial planning and investment advisory services are offered by Oakmont Advisory Group, LLC, a Registered Investment Advisor in the state of New Mexico. Insurance products and services are offered through Oakmont Insurance, LLC. Oakmont Advisory Group, LLC and Oakmont Insurance, LLC are affiliated companies. • This information is designed to provide general information on the subjects covered. The specialized information we provide regarding tax minimization planning is not intended to and cannot be used by anyone to avoid paying federal, state, or local municipality taxes or penalties.
  18. 18. Thank you.
  19. 19. Market Update September 2019
  20. 20. The Agenda. 1. How much have things improved? 2. 4 Key Influences on this Market 3. Recession Indicators 4. Bull / Bear Trends Fee-based financial planning and investment advisor services offered by Oakmont Advisory Group, LLC, a registered investment advisor in the state of New Mexico. Insurance products and services are offered by Oakmont Insurance, LLC. Oakmont Advisory Group, LLC and Oakmont Insurance, LLC are affiliated companies.
  21. 21. How much have things improved? 1. US / China to hold 14th “high level” negotiation in October 2. Geopolitical threats have quieted…for now 3. Global central banks are about to begin more easing 4. Economic data was better than expected Fee-based financial planning and investment advisor services offered by Oakmont Advisory Group, LLC, a registered investment advisor in the state of New Mexico. Insurance products and services are offered by Oakmont Insurance, LLC. Oakmont Advisory Group, LLC and Oakmont Insurance, LLC are affiliated companies.
  22. 22. Recession Indicators. • 12 variables have historically foreshadowed a looming recession • As of July 31, 2019, two variables are indicating a recession (Yield Curve and Commodities) and four are signaling Caution Fee-based financial planning and investment advisor services offered by Oakmont Advisory Group, LLC, a registered investment advisor in the state of New Mexico. Insurance products and services are offered by Oakmont Insurance, LLC. Oakmont Advisory Group, LLC and Oakmont Insurance, LLC are affiliated companies.
  23. 23. Bull/Bear Trends. Relative Strength Index (RSI) Relative strength index is a technical indicator used to determine if an asset class is moving toward an overbought/overvalued condition. An asset class is deemed to be overbought/overvalued once the RSI approaches a level of 70. Approaching an RSI level of 70 or higher indicates an asset class is a good candidate for a pullback or downturn. Moving Average Crossover Moving Average Crossover occurs when an asset class’ short-term moving average crosses above or below its long term moving average. The two most common moving average time frames used in crossover analysis are the 50-day moving average and the 200-day moving average. A Death Cross occurs when an asset class’ 50-day moving average crosses below its 200-day moving average. Conversely a Golden Cross occurs when an asset class’ 50-day moving average crosses above its 200-day moving average. Moving Average Convergence/Divergence (MACD) MACD is a trend-following momentum indicator showing the relationship between two moving averages. The MACD is calculated by subtracting the 26-day exponential moving average from its 12-day exponential day moving average. The result is MACD. Next, a 9-day moving average of the MACD is used to develop a trend or signal line. When the MACD falls below the signal line, it’s a bearish signal. When the MACD rises above the signal line, it’s a bullish signal. Fee-based financial planning and investment advisor services offered by Oakmont Advisory Group, LLC, a registered investment advisor in the state of New Mexico. Insurance products and services are offered by Oakmont Insurance, LLC. Oakmont Advisory Group, LLC and Oakmont Insurance, LLC are affiliated companies.
  24. 24. The Chart: Stocks 1. RSI: Bull Trend 2. Golden Cross/Death Cross: Bull Trend 3. MACD: Bear Trend US Equity Bull/Bear Indicator: 67% Bull 33% Bear Fee-based financial planning and investment advisor services offered by Oakmont Advisory Group, LLC, a registered investment advisor in the state of New Mexico. Insurance products and services are offered by Oakmont Insurance, LLC. Oakmont Advisory Group, LLC and Oakmont Insurance, LLC are affiliated companies.
  25. 25. The Chart: Bonds 1. RSI: Bull Trend 2. Golden Cross/Death Cross: Bull Trend 3. MACD: Bull Trend US Aggregate Bull/Bear Indicator: 100% Bull Fee-based financial planning and investment advisor services offered by Oakmont Advisory Group, LLC, a registered investment advisor in the state of New Mexico. Insurance products and services are offered by Oakmont Insurance, LLC. Oakmont Advisory Group, LLC and Oakmont Insurance, LLC are affiliated companies.
  26. 26. Portfolio Changes. Model Holdings Previous Weight New Weight Changes Tactical Growth Total US Stock Market Gold Real Estate 33.33% 33.33% 33.33% 33.33% 33.33% 33.33% No Changes Flexible Growth Small Cap Stocks 20+Year Treasury Bonds Healthcare 25.00% 25.00% 50.00% 25.00% 25.00% 50.00% No Changes Sector Rotation Consumer Staples Utilities Materials Real Estate Technology 25% 25% 0% 25% 0% 25% 25% 0% 25% 25% Rotation to include Technology Passive Growth Diversified Equity ETF’s 100% 100% No Changes Passive Income Diversified Bond ETF’s 100% 100% No Changes Flexible Income High Yield Bonds Municipal Bonds 7-10 Treasury Bonds 100% 0% 0% 50% 50% 0% Increased exposure to Municipal Bonds Fee-based financial planning and investment advisor services offered by Oakmont Advisory Group, LLC, a registered investment advisor in the state of New Mexico. Insurance products and services are offered by Oakmont Insurance, LLC. Oakmont Advisory Group, LLC and Oakmont Insurance, LLC are affiliated companies.
  27. 27. Thank you! David Hicks Vice President, Investment Advisor david@oakmontadvisory.com 505.821.6966 Fee-based financial planning and investment advisor services offered by Oakmont Advisory Group, LLC, a registered investment advisor in the state of New Mexico. Insurance products and services are offered by Oakmont Insurance, LLC. Oakmont Advisory Group, LLC and Oakmont Insurance, LLC are affiliated companies.

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