June 2019 Commentary
In spite of improved economic activity in the first quarter and the accompanying sharp stock market rally, I am very cautious about the months ahead.
It is my view that the long bull market is nearing an end and that a coming recession will be evident by year end 2019. The reality is that overall debt levels —government, corporate and individual—has risen to historically high levels. Of most concern is that fact that much of the debt is of questionable quality and, reminiscent of 2007, barely understood by many of the experts. The effect can be seen even today by (1) the sluggishness in most of the world economies and the US unable to rise above the 2.5 and 3% growth targets and (2) very low-interest rates featuring an inverted yield curve in the treasury market.
In this environment, I advise investors to prudently re-evaluate their risk tolerance and, where appropriate, take action to rebalance their investments portfolios. We encourage you to include in these discussions the merits of alternative investments that could generate good returns with less volatility.
As always, I am happy to share my views with any of our clients and prospects.
Kairys Group, Inc.
Capital Markets Director