Transitioning from Stabilization to Growth ……

Ever since the recession in 2008, the market has been driven by the Federal Reserve Bank. Investors would wait with bated breath to see what the Fed could possibly do to keep the U.S. from sinking into a depression. Well, the Fed did their job. The U.S. has turned the corner and seems to be well on the road to solid growth rates again. Now, as the Fed has started to raise interest rates, the market doesn’t seem to be paying them too much attention. Instead, the markets are now focused on President Trump and Congress.

With the election of a Republican President and Congress, everyone thought that the Republican agenda would be steamrolled right through. Well, it seems that they have forgotten how to lead. With the Republican’s failure to repeal the Affordable Care Act, the market has become a bit more concerned about all of the promises that they have made. This has given the market a reason to pause, to catch it’s breath. This isn’t all a bad thing. The market has had a good run since November.

Looking forward, we believe that the President and Congress will continue to pass business friendly legislation. Besides their promise to revisit the Affordable Care Act, we are looking forward to reduced regulation and tax cuts to improve corporate profitability. This improved profitability, combined with a tighter labor market and increasing salaries, will keep this bull market on track.

Trade costs continue to decline. Through our negotiations with Fidelity last year, we were able to reduce the trade costs incurred on client accounts for options trades from a $10.95 base cost to a $4.95 base cost (when options are traded the trade cost is the base cost plus $0.75 per options contract). Then earlier this year, Fidelity announced that all stock trade costs would be lowered to $4.95. Working with Fidelity, we made sure that we received that reduction as well. With these latest reductions in direct costs to our accounts, we are glad that Fidelity has been our custodian for over 30 years.

Very truly yours,

Mike Cantlon

Thomas Guyett

Robert Gephart