1. Mark R. Holloway, C.F.A. Chief Investment Officer March 14, 2019
2019 Spring Economic Seminar The Outlook For The Economy and Capital Markets “Magical Things”
Mark R. Holloway, C.F.A.
Chief Investment Officer
March 14, 2019

2. The Economy
The outlook for the domestic economy remains healthy. No recession in 2019.
Leading economic indicators are positive.
Interest rates will stay low.
Corporate profits are growing.
Housing appears to be recovering.
Consumer and business confidence is high.
Consumer spending is vibrant.
Employment is very strong.

5. The Bond Market Interest rates will remain relatively stable in 2019.
Inflation is low.
The Federal Reserve has changed policy.
Fed Funds futures are positive.
Foreign rates remain low compared to U.S. bonds.
Political expediency will keep rates low.

6. The Stock Market
Stocks remain the financial asset class of choice. We are still in a secular bull market for stocks.
Valuations are reasonable.
Corporate profits are growing.
Interest rates remain low.
Historical returns favor stocks.

10. What Could Go Wrong The Federal Reserve and Interest Rates
Global Economic Slow Down
Politics
Algorithmic Trading
Debt

12. Volatility and Why You Should Ignore It
No one can time the market
Confidence in the U.S. Economy and Capital Markets
Human Nature
History

15. What to do in a volatile market and Uncertain Times?
Review Asset Allocation
Diversify, Diversify, Diversify
Reduce Bond default and Interest Rate Risk
Quality Floor to Reduce Default Risk
Reduce Average Maturities
High Quality Stocks
Dividend payers and growers
Consistent and sustainable growth rates
Clean Balance Sheets

16. “Magical Things”

17. “Magic”
The stability of the economic and political system in the United States
Historical returns from the stock market
Quality Stocks-A Free Lunch
Time and the Market
The Power of Compounding

21. The Real Magic: The Power of Compounding
XYZ Corporation ( A real Company)
Sustainable Earnings Growth of 9-10%
Stated Dividend Payout Ratio of 40%
Current Dividend Yield of 3.0%
Compound Five Year Dividend Growth of 18%
Yield on Cost
5 Years-4.9%
10 Years-7.8%
20 years-20.2%