At Peachtree Investment Partners, we have a long-term relationship with our clients. We work with you to build a customized portfolio that reflects your goals, your financial situation and your approach to risk. Our primary focus has been and remains on preservation of principal.
We use a number of criteria to evaluate companies for client portfolios. We look at a company’s historical performance as well as the potential for future performance. In particular, we consider a company’s profitability and its positioning in the market. We also prefer companies that pay dividends.
We make dividend-paying stocks the centerpiece of our clients’ portfolios. Dividend-paying stocks can add significantly to overall returns and also can help smooth out volatile markets. Although we do invest in some select stocks that do not pay dividends, we focus mainly on those that do.
Last week, on August 14, the Dow Jones Industrial Average fell 800 points, its biggest drop of the year. Investors were spooked by the specter of recession, and those concerns had been nudging markets downward for a while, though not as dramatically as on August 14. Markets recovered somewhat the rest of the week, but they are still skittish and well off the historic highs set earlier this year.
Like a table, market performance rests primarily on four individual legs: profits, inflation, interest rates and psychology. If you are feeling a little jittery about the markets, it might help to take a look at each of these legs.
The economic outlook is a mixed bag after the first quarter, with positive signs and a few things that are more concerning. Let's start with the positive signs.
The stock market continues strong. The Standard & Poor's 500 is up double digits for 2019, and stock prices are still reasonable. Unemployment is low, inflation is low, and GDP growth is positive. Corporate earnings are positive, although they are not as strong as they were in the first part of 2018.
