First Quarter 2019 Commentary After a tumultuous market sell off in the 4th quarter, the markets managed to recover 2018 losses within a couple months and ended up posting the best quarterly gains since 2009. Although this strong performance gives us reason to celebrate, it’s also important to remember: we are not out of the woods just yet. Economic fears and uncertainty are still casting a shadow over the marketplace.Concerns about a global slowdown in economic growth persist. Disappointing manufacturing numbers from the Eurozone coupled with political risk, trade conflict, and failed Brexit negotiations have sparked an appetite for risk-free assets. This flight to safety has pushed down the 10-year Treasury rate. Meanwhile, the Federal Reserve lowered their forecasts and decided to put rate hikes on hold for now. They kept the Fed Funds Rate at 2.5%, which directly influences short term rates.As a result, we saw the yield curve invert for the first time in 12 years. The 10-year Treasury yield fell below the 3-month T-bill rate. The ability to earn more interest on a 3 month T-bill than a 10-year Treasury Bond is contrary to a typical risk/reward correlation. If the yield curve inversion persists, history shows us that a recession may follow within the next 12 to 18 months. This development has certainly garnered attention in the media. We expect to hear more talk about an imminent recession, but our hope is that it doesn’t become a self-fulfilling prophecy.Since the markets are forward looking, and economic data is backward looking, we are likely to see a correction (or bear market) before the data confirms (or denies) a recessionary period. Given the current state of the economy, we want to participate in potential growth, but also have downside protection. In our equity portfolios, we are moving away from the riskiest stock exposure into more a defensive stance as a method of managing risk. In addition, we are boosting quality bonds in our core fixed income portfolios to serve as insurance.Although we have an active strategy in place, we encourage you to evaluate your own risk tolerance and financial objectives. If there have been any changes to your financial circumstances or investment objectives, please contact us right away. We are here to help you determine if your target asset allocation is in line with your current and future financial needs. The value of our advisory services is enhanced when we are working together toward your financial goals. We thank you for the opportunity to partner up with you, as well as your continued trust.In closing, we are required to notify you about a recent update to our disclosure brochure, ADV Part 2A & 2B. There have been no material changes since our last annual update. Our services, fees, and the way we do business have remained the same. However, our ADV Part 2A & 2B is available to you at no charge anytime you wish to view it. You may download a PDF version by clicking here.