Quarter-End Snapsot

Q3 2017

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Firm Update

from J. Carter Tolleson, Chief Executive Officer

J. Carter Tolleson, Chief Executive Officer

We consider ourselves very blessed to be in a business where every day is spent serving families and helping them simplify the complexities of wealth. Since the very beginning, we have been committed to taking incredible care of our client families by treating them the way we ourselves want to be treated. We believed that if we remained focused on our clients, served their best interests and strived to eliminate any conflicts, the business would thrive – and it has. We have grown steadily and thoughtfully since 2000, and done so in a way in which the only client impact was better service. Our growth has been largely attributed to client referrals – for that, I am humbled and deeply appreciative.

Every year, we focus on new initiatives to improve the client experience, further professionalize our services and invest in technology. This year, we have completed multiple projects focused on delivering more relevant and timely information to you. Over the next few months, you will begin to see the results of these improvements, starting with this quarterly update. The update is intended to keep you informed of what’s happening at Tolleson Wealth Management and introduce current topics of interest from our senior leaders. Over the next few weeks and months, you can expect a newly designed and more dynamic website, quarterly reports that will clearly show your portfolio’s performance compared to your risk tolerance and investment goals and, ultimately, real-time reporting along with the introduction of an online client portal. We are excited about these changes and hope you like them.

As always, thank you for your support. We are extremely honored to serve you and your family.

Market Outlook

The third quarter of 2017 is characterized by a familiar story: equity prices rose and bond yields fell amid modest economic expansion. While this narrative has continued for the last 8.5 years, you may have heard investment managers, other investors and the press suggesting that the current bull market is entering the “late innings” of the game. These prognosticators imply that we should expect a change in the market cycle or a correction in the near term. Given that the summer months are now turning to fall, the prospect of continued growth in an already long economic expansion can be likened to October’s post-season in Major League Baseball (MLB).

Each of the eight teams that made it to the MLB playoffs were uncertain when they would play their last game, but they knew that what led them to a winning record in the regular season could increase the probability of a longer post-season run. These ingredients of success include a diversified and deep lineup, good defensive play and experienced managers with sound game plan execution.

Similarly, certain “winning” domestic factors have facilitated the extended period of U.S. economic growth and market appreciation including corporate earnings growth, low interest rates and increasing disposable income. Not only do these positive signs remain in place today in the U.S., we are seeing a more synchronous economic expansion globally as well. 

With these tailwinds still in play, the U.S. economy could feasibly continue to grow into its own post-season, while the global economy could be characterized as still in its regular season.  

As the physicist Niels Bohr said, “Prediction is very difficult, especially if it’s about the future.” This is especially true of the capital markets. Just as each of the remaining MLB teams’ post-season will come to an end at some point, we remain cognizant that the same will eventually happen in this market cycle. However, empirical evidence has shown that attempting to predict the exact timing of a cycle will be a losing proposition more often than not.

With this in mind, we tend to fall back on the core tenets that remain the bedrock of our investing philosophy for the past 17 years: balanced, diversified portfolios with an emphasis on capital preservation and a long- versus short-term lens. Remaining convicted in this philosophy has historically proven to provide a nice return on capital for patient investors.

We will continue to monitor global events closely and your advisor will contact you with any recommended changes to the portfolio we feel are appropriate to help you meet your long-term financial goals.

General Performance Information
The performance results in this presentation have been compiled by Tolleson Wealth Management (“TWM”). Past performance is no guarantee of future results. No repre-sentation is being made that any account will or is likely to achieve profits or losses similar to those shown. All investments involve risk, including the loss of principal. The indices disclosed are intended to represent general market performance and may or may not be appropriate for performance comparisons. An investor cannot invest directly in the index. This information discusses general market activity, industry or sector trends, or other broad-based economic market or political conditions and should not be construed as re-search or investment advice. Certain information contained herein concerning economic trends and performance is based on or derived from information provided by independent third-party sources. Opinions expressed are current opinions as of the original publication date appearing in this material only. Any opinions expressed are subject to change without notice and TWM is under no obligation to update the information contained herein. TWM disclaims responsibility for the accuracy or complete-ness of this report although reasonable care has been taken to assure the accuracy of the data contained herein. This material has been prepared and is distributed solely for informational purposes only and is not a solicitation or an offer to buy a security or instrument or to participate in any trading strategy. This report may not be reproduced, distributed or transmitted, in whole or part, by any means, without written permission from TWM. If you have any questions regarding this presentation, please contact your TWM representative.