September 15, 2017 Letter to Clients

Darnell Lamont Walker said, “Summer is leaving silently. Much like a traveler approaching the end of an amazing journey.” New journeys and new experiences seemed to be the theme of my family’s summer this year. My weekends were filled with my youngest daughter competing in a dance competition on Cape Cod and my oldest daughter traveling most of the summer with her basketball league. My son’s soccer team took home the title of National Champions at a tournament in Indiana, which ended with a spontaneous trip to see Niagara Falls for the first time. Jodie and I certainly enjoyed spending this time together as a family, especially since time seems to go by faster each year as the children get older.

The end of summer and the beginning of Autumn have always had the feel of a new year to me as the kids are back to school in grades 4, 6 and 8 this year and, here at LePage Financial Group, we prepare for the last Quarter of 2017.

Unfortunately, summer has not allowed for an easy transition into fall with the devastating tropical hurricanes and wildfires across the country. Our thoughts and wishes are with those of you personally impacted and those of you that have family or friends affected by these events. The well-being of everyone in the areas experiencing these catastrophic events is first and foremost on our minds, however we must also be mindful of the impact to the markets.

Bracing for the Impact on Markets

The early consensus among economists is that, while each of the hurricanes as well as the wildfires are profound humanitarian disasters, they are unlikely to become economic ones. While it will take several months or longer to fully determine the impact to the U.S. economy, historically the impact of natural disasters tends to be counteracted by subsequent rebuilding efforts including a boost in infrastructure and construction spending. The near-term economic effects, however, can be felt in the U.S. jobs market, retail sales and manufacturing. Businesses heavily invested in Texas and Florida including airlines that rely on Houston as a hub and those that depend on tourism to southern Florida are feeling the immediate economic impact. At the same time, some sectors such as the auto industry, construction companies and home improvement retailers are poised to see a boost from these disasters as communities rebuild. According to the New York Fed, the long-term effect will be a lift in economic activity as a result of these disasters.

Economy Still Supports the Bull

Seasonal tendencies aside, summer was quite uneventful in the markets with the exception of August. This particular August presented a few challenges to the markets most notably with the escalation of tensions with North Korea and the continuing U.S. political noise. Nevertheless, the stable performance in August proved that we’re still in a resilient bull market.

Economic indicators such as jobs growth, manufacturing activity and consumer and business spending will keep us in the bull market camp for now, notwithstanding some near-term risks. Looking to the fall, it does not appear at this point that the Fed will be forced to aggressively raise interest rates. That, coupled with healthy economic growth and strong corporate earnings, leads us to anticipate continued strength in the markets.

However, issues in Washington including the debt-ceiling, the budget, tax reform and the ever-present global and national uncertainties may lead to small pullbacks. As your advisor, I know that it’s important for us to have a plan in place when the inevitable correction happens, which is why I believe that diversification and active money management are the best defense against potential market declines.

As discussed in our previous letter, while a market correction can be uncomfortable and concerning for investors, it is a normal occurrence and presents buying opportunities within a well-diversified portfolio. In addition, our office employs tactics to reduce risk for you by incorporating customized hedging strategies as a buffer against market swings.

In Other Exciting News

On a more personal note, I am pleased to share with you that Darci, a member of LePage Financial Group, was married last month at Look Park in Northampton. Both myself and Jodie along with Colleen and her husband, Tony, had the pleasure of sharing in her big day. A significant life event such as a this can remind us that it is important to have a clear vision of your personal financial plan. Although I recognize that life can get very busy, I encourage you to contact our office to schedule a time to discuss your portfolio, any life changes along with any questions or concerns you may have so that together we can continue the path toward your goals.

As always, we extend our gratitude for the continued confidence you place in LePage Financial Group, and we hope you and your family find time to enjoy all that Autumn has to offer.


Steve LePage