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.
2. The Agenda
1. Market Overview
2. Two Big Things to Watch in 2020
3. End of Year Items
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3.
4. 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
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5. 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
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6. 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.
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7. SP500 Bull + Bear Indicators
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8. AGG Bull + Bear Indicators
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9. 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
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10. 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.
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11. 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.
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12. • 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
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You 1040
13. 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!
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14. 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
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15. Year End Items
• Review your monthly/annual budget figures and adjust
where necessary for 2020
16. Oakmont Website
Be sure to visit our New + Improved website!
Notification of new content alert
1. Blog updates
2. Radio + Podcasts
3. Event announcements
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18. 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.
21. 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.
22. 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.
23. 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.
24. 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.
25. 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.
26. 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.
27. 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.
28. 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.
