Quarter-End Snapshot

Q1 2018

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Firm Update

from J. Carter Tolleson

J. Carter Tolleson

After a relatively smooth ride in the public markets last year, 2018 has ushered in more volatility and “noise” than we have seen in a while. This is the time we find that Tolleson Wealth Management shines. Our investment strategy and core beliefs around asset protection is a key strength we offer to our client families.

Additionally, the firm has continued to receive recognition by industry groups and national publications that not only acknowledges our service, but also our culture and business model.

InvestmentNews named us a Best Place to Work for Financial Advisors, measuring areas such as culture, benefits, career paths and more. Tolleson Wealth Management President Richard Joyner was listed #2 in Barron’s Top Advisor Rankings. The national Private Asset Management Awards announced us as best multi-family office.

While it has never been our goal to collect trophies, it’s always nice to receive these accolades from peers and other industry groups. Receiving that national award for best multi-family office back in February was a real honor and certainly one worth celebrating.

But I am especially proud of our people and what we have all built together, which is what makes Tolleson Wealth Management so special. The Best Place to Work award judged the firm on career opportunities, employee satisfaction and overall company culture. We pay a tremendous amount of attention to – and strongly believe – our people are vitally important to creating and maintaining the high quality of service we provide.

We are also very proud of Richard Joyner’s #2 advisor ranking in the state of Texas. This honor is well deserved and highlights our commitment to providing the best advice and service possible. Richard was one of the few, if any, advisors on the list that worked for a private and independent advisory firm or multi-family office; a unique distinction that we are very pleased with. As President of Tolleson Wealth Management and our lead advisor, this recognition emphasizes our commitment to talent and to providing thoughtful advice and service to our client families.

As always, it is an honor and a privilege to serve you and your family.

Storms and Market Turbulence

Weather is a newsworthy topic lately— from the devastating Hurricane Harvey and Irma this past fall to now Nor’eastern winter storms hitting as we enter spring. Those of us in Texas likely know people either rebuilding or repairing their home, making them less susceptible to future hurricane damage. When we think of how we protect our assets, a similar pattern also rings true for how we construct a solid foundation for client portfolios.

Even though financial markets experienced one of those rare instances where nothing seemed to go wrong in 2017 (unlike what mother nature has given us lately), we see the first three months of this year as a normal part of the market cycle. The markets soared in January due to corporations benefitting from tax reform pushed through by the Trump Administration, but ended up hitting a few unexpected bumps in the road in February and March. Even though investors should expect this from time to time, many were caught by surprise after such strong investment returns in 2017.

There are two long-standing trends that supported the bull market over the last nine years that we anticipated as possible headwinds in 2018: higher inflation expectations and interest rates. They both came to fruition early in the year as wage growth unexpectedly picked up in January. Although this is a sign that the economy continues to improve, it caused investors to worry that higher inflation (the increasing prices of goods) would weigh on future market returns. As a result, interest rates spiked and equity markets rapidly sold off into correction territory (down 10%).

Since then, reports of inflation data are in line with expectations and interest rates lowered slightly as investors absorbed the information and acknowledged that global economic growth, corporate fundamentals and earnings growth all remain strong.

Geopolitical risks (potential trade wars) and worries of increasing regulation over social media caught headlines towards the end of the quarter, further adding to volatility in the equity markets. While much of this news has some investors beginning to fear a bigger storm rolling in, the big picture remains the same: improving economic and earnings growth, interest rates creeping higher and valuations remaining high relative to long-term history of fixed income and equities.

Weather is often unpredictable and can cause much destruction – we’ve seen it happen time and time again. The financial markets can sometimes echo that uncertainty as we don’t know exactly when the next financial markets storm will hit or to what magnitude. Our long-standing approach of constructing well-diversified, high-quality portfolios is essential to how we plan for the unknown, allowing clients peace of mind when they need it most.

General Performance Information
This presentation has been compiled by Tolleson Wealth Management (“TWM”).  Past performance is no guarantee of future results. No representation is being made that any account will or is likely to achieve profits or losses.  All investments involve risk, including the loss of principal. 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 research or investment advice.  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 completeness 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.
 
Awards & RecognitionInvestmentNews partnered with Best Companies Group, an independent research firm specializing in identifying great places to work, to compile the inaugural survey and recognition program. The list is a first of its kind for the financial advice industry. Tolleson Wealth Management was chosen as one of this year’s top-50 based on employer and employee surveys delving into everything from company culture, benefits, career paths and more. Barron's Top Advisor rankings are based on data provided by over 4,000 of the nation’s most productive advisors. Factors included in the rankings: assets under management, revenue produced for the firm, regulatory record, quality of practice and philanthropic work. The Private Asset Management Awards recognize and reward top investment professionals, wealth advisors and other key service providers operating within the private asset management industry. Tolleson Wealth Management was named the 2018 Private Asset Management (PAM) Award for Best Multi Family Office - Overall among wealth managers with more than $2 billion in assets under management. The judging process, using an independent panel made up of industry experts, is based on a mixture of qualitative and quantitative performance indicators. They are based on data provided by over 4,000 of the nation’s most productive advisors. Factors included in the rankings: assets under management, revenue produced for the firm, regulatory record, quality of practice and philanthropic work. To learn more about rewards and recognitions, please click here.