All good things arrive unto them that wait…..-Mark Twain

As we mentioned in our last letter, we continue to see global economic growth. This bodes well for the stock market. Removing uncertainty (Mueller probe, Fed rate hikes, etc.) continues to drive the markets higher. If we could only get positive resolution to the U.S. – China trade issues, then companies could really start to execute on their growth strategies which would be beneficial to our holdings.

In the fourth quarter of last year, the equity market was reacting to emotional biases present in the news and the market. This can happen in the short-term. In the long-run, it is the fundamentals that matter. We are fundamental, value oriented investors. We invest in securities for months and years instead of days or weeks. We use our options to hedge against downturns. We continue to look for less volatile assets than stocks with covered calls, but we do not feel that the risk/return is to our advantage at this time.

The U.S. economy continues to do well. Unemployment continues near historic lows. Wages are starting to pick up. U.S. GDP is going to grow in the first quarter, but at a slower rate than last year. The Federal Reserve has signaled that they are not going to raise interest rates this year. This will allow companies to borrow money at cheaper rates than previously thought. The Initial Public Offering Market is heating up with more companies deciding to go public. In March, manufacturing activity picked up in both the U.S. and China. These are all positive trends and are reasons why the market recovered so quickly in the first quarter.

A few clouds still remain on the horizon. The U.S. – China trade negotiations continue. Britain continues to try to separate from the European Union. There is a concern that the yield curve is flattening/inverting. We are continuing to monitor the market for signs of stress. While we don’t think that the market can keep up the pace of gains that we had in the first quarter, we expect the market to be higher at the end of the year.

Our business is based on trust between you (our clients) and us (your financial advisors). Referrals from existing clients are the lifeblood of our business. If there is someone that you know who would benefit from working with us, we ask for an introduction. We appreciate your continued trust.

Sincerely,

Michael Cantlon

Thomas Guyett

Robert Gephart