Second Quarter 2017 Commentary While political themes continue to dominate the news worldwide, investors are still hopeful for fiscal stimulus, tax reform, and deregulation that generated a post-election surge in the markets. As a result, asset classes continue to post solid returns amid low volatility levels.The U.S. economy remains in the mid-to-late phase of the business cycle and is still showing signs of improvement. We’ve seen a rise in wages due in part by a tightening labor market. The boost in wage growth has been great for consumer spending, but weighs heavily on profit margins. Although the outlook for corporate earnings growth has waned a bit, an action toward significant fiscal stimulus, tax reform, and deregulation will renew outlook and make room for higher equity valuations. New market highs, falling long term rates, and a weaker dollar have given the Federal Reserve reason to pursue its plan to gradually raise rates and begin reversing its asset purchase program.International markets have been showing signs of a pickup in growth. With the fears of further political turmoil subsiding, lower valuations have become quite attractive for capital opportunities. China’s economy has gained traction helping boost a recovery in global trade and commodities. More favorable economic conditions abroad have guided the overall global economy toward a steady expansion after several years of underperformance.When we piece all of this together, we continue to favor U.S. stocks and bonds, but we see the long-term benefits of complementing our core domestic positions with international exposure. For fixed income, we are focused on building protection while hedging against interest rate risk and inflation. Our approach remains defensive in keeping a balanced portfolio that can sustain all seasons of volatility.While our investment strategy is in place, we still encourage you to review your risk tolerance and financial objectives to confirm your stock/bond mix is consistent with your goals. If there have been any changes to your financial circumstances, please reach out to us. We value our client relationship and enjoy partnering with you to achieve your financial goals.