Behind the Numbers With Brad McMillan, Chief Investment Officer, Commonwealth Financial Network
There has been much discussion recently about how the great financial crisis kicked off 10
years ago. … The real lesson of the financial crisis, to my mind, was that the system was
more vulnerable than anyone thought. Because of that, investors did not realize the risks
they were taking. Since then, I personally have been focused on risks even over returns.
Risk, in the form of asset allocation, debt, or what have you, is what gets you into trouble.
Even if our models and predictions fail, if we simply are not that exposed, the damage will
be limited. That, in fact, is the real lesson of the great financial crisis: take less risk. That
lesson is as timely and, I suspect, as unappreciated as it was in 2007, in 1999, or prior to
any other crisis.
—Brad McMillan, "The Great Financial Crisis: 10 Years Ago This Week"
ECONOMIC AND FINANCIAL MARKET FORECAST
Below is a comparison of current economic and financial data with the panel’s
composite forecast for the next six months. (Through April 2019)
Current Level1 Strategists’ Predictions
STOCK MARKET 25,857 25,596
(Dow Jones Industrials)
BOND MARKET 2.9% 3.2%
(10-Year Treasury Note)
ECONOMIC GROWTH 3.8% 2.9%
(Annual Growth of Real GDP)
INFLATION 2.7% 2.4%
(Annual Increase in CPI)
SHORT-TERM RATES 2.2% 2.5%
(Three-Month Treasury Bills)
( 1) As of 9/10/18
FOR A BALANCED PORTFOLIO
The statistics below are a composite of results from our monthly poll of leading
portfolio strategists and are designed for a balanced growth investor.
STOCKS BONDS CASH
52.2% 32.0% 15.8%
12-MONTH TRENDS IN
LOW HIGH CURRENT
STOCKS 52.2% 61.0% 52.2%
BONDS 26.8% 32.0% 30.0%
CASH 10.8% 18.3% 17.8%
RANGE OF CURRENT
STOCKS 10% 70%
BONDS 20% 40%
CASH 1% 50%
CHANGE FROM PRIOR
STOCKS BONDS CASH
0% 0% 0%
Portfolio strategists polled 9/4/18 - 9/7/18
A. Gary Shilling & Co.
Dudack Research Group
CASH HOLDINGS BELOW PANEL AVERAGE
Commonwealth Financial Network