November - Sumner Wealth Management

If you are having issues seeing this email, please view it in your browser.

 swm noname    

- NOVEMBER 2017 -


 In This Edition:

  • Spanish Showdown
  • About SWM



Market Performance

Stock Market


 YTD '17


 Total U.S. Market1 +2.18% +16.40% +23.98%
   Domestic Large Cap Equity2 +2.33% +16.91% +23.63%
   Domestic Small Cap Equity3 +0.85% +11.89% +27.85%
 International Equity4 +1.88% +23.41% +23.64%
   Developed International Equity5 +1.52% +21.78% +23.44%
   Emerging Market Equity6 +3.51% +32.26% +26.45%

Fixed Income


 YTD '17


 U.S. Investment Grade Bonds7 +0.06% +3.20% +0.90%
Cash Equivalent8 +0.08% +0.64% +0.69%
1Russell 3000 2S&P 500 Index 3Russell 2000 Index 4MSCI ACWI ex-U.S. Index 5MSCI EAFE Index 6iShares MSCI Emerging Markets Index 7Barclays Capital U.S. Aggregate Bond Index 8Barclays Capital 1-3 Month U.S. Treasury Bill Index   

Dear Visitor,

Well the cold has arrived and the Holiday Season is just around the corner.  Just remember to breath and embrace your loved ones!  Things can happen quickly so enjoy the Holidays.

My Wifes Cancer Update:  Big celebration!  Last chemo treatments was last Thursday, and the RN's sung a song and she rang the bell!  She is doing very well, I call her a "Super Women" becuase of what she has been through and defeated cancer.  She started radation this past Tuesday and she said it was a breeze compared to chemo.  She will be finished with radiation in five weeks.  Just in time for Christmas!  So, I will enjoy this Christmas!


Spanish Showdown, Slow Brexit

With separatists in Catalonia pushing for independence, Spain's democratic government is facing a constitutional crisis. Meanwhile, little progress has been made in negotiations on the terms of the United Kingdom's pending exit from the European Union.

Geopolitical tensions can affect economies and move financial markets. Here's a closer look at these two political standoffs taking center stage in Europe, either of which could influence national growth prospects as well as some international investments.


Spanish Instability

Catalonia is the northeastern region of Spain that includes Barcelona. It has its own language and cultural heritage. The region has 7.5 million residents, or about 16% of Spain's total population, and it accounts for nearly 20% of Spain's gross domestic product (GDP).1

The historical roots of this conflict are complex, and some divisions have existed for decades if not centuries. However, the current situation stems from a 2015 election that put separatist parties in control of Catalonia's regional parliament.2

Spain's 1978 constitution requires a nationwide election for any one of the 17 autonomous regions to gain full independence. On October 1, Catalonia held a unilateral referendum on independence, even though the nation's constitutional court had ruled it illegal. Violence broke out between police and voters, leading to public demonstrations.3

In an attempt to restore order, Prime Minister Mariano Rajoy invoked Article 155 of the Spanish Constitution, asking for emergency powers that were granted by the Senate. The Catalan government is being stripped of its autonomy, and certain agencies could be controlled by the central government in Madrid until new elections are held on December 21, 2017.4

Economic Costs

Catalan leadership contends that the current tax structure is unfair and the region would be better off on its own. But EU officials have backed the Spanish position, and Catalonia seems to have the most to lose, at least in the short run.5 More than 1,100 companies have already started the process of moving their legal headquarters out of the troubled region.6

If political unrest escalates, tourists might avoid Spain and especially Barcelona, a popular destination that welcomed 8.4 million travelers last year. Tourism accounted for a significant slice (14%) of Spain's GDP in 2016.7

The crisis could even hamper a robust recovery in the EU's fourth largest economy. Spain's GDP expanded by 3.2% in each of the past two years and is expected to grow around 2.8% in 2017.8However, the Spanish government has cut its forecast for 2018 GDP growth from 2.6% to 2.3%, citing the clash with Catalonia.9

The potential for more severe economic damage for Spain may depend on how punitive measures are carried out and the degree of resistance by Catalan leaders and citizens.

Brexit Uncertainty

As the U.K. prepares to leave the EU, a weaker pound, rising inflation, and a slowdown in consumer spending have taken a toll on the U.K. economy. In the third quarter of 2017, U.K. GDP annual growth slowed to 1.5%, down from 1.8% in the first quarter.10

Brexit terms are not expected to be finalized until shortly before the deadline in March 2019, and the possibility of "no deal" or a "disorderly Brexit" is still a concern. In late October, Prime Minister Theresa May dashed hopes that a transitional trade pact (intended to help businesses plan for the two-year period beyond the exit date) will be forged early in 2018.11

EU on the Mend

A major concern surrounding both of these events is the possibility of contagion — that dissatisfied factions in other EU nations might be inspired to follow suit. But the region has made its way through a challenging decade with debt crises, high unemployment, and two economic downturns. In fact, the EU economy has been on a promising streak since mid-2013, with the pace of GDP growth picking up to 2.3% in the second quarter of 2017.12

Portfolio Implications

Many investors include international investments in their portfolios to help increase their overall level of diversification. Some international investments cast a wide net that strives to capture worldwide economic activity, whereas others focus on a specific region or a single country.

If you own international investments, be prepared to hold tight during bouts of market volatility. It may be tempting to shift assets into or out of a region or nation based on the most recent headlines, but doing so could cause you to buy at high prices or sell at market lows, turning paper losses into permanent ones. You might review your portfolio periodically to help ensure that your asset allocation stays aligned with your risk tolerance and investment strategy over the long term.

Asset allocation and diversification are methods used to help manage investment risk; they do not guarantee a profit or protect against loss. All investments are subject to market fluctuation, risk, and loss of principal. When sold, investments may be worth more or less than their original cost. Investing in foreign securities carries additional risks, such as differences in financial reporting, currency exchange risk, as well as economic and political risk unique to the specific country, that may result in greater share price volatility. These risks should be carefully managed in light of your goals and risk tolerance.


About SWM

Our firm assist individuals, families, and businesses in proactively preparing themselves for a broad range of financial decisions and life events by helping our clients gain income protection, financial stability, with a solid plan.  We are an integrated, Wealth Manager Specialists. 

Mark Sumner
Financial Advisor


Sumner Wealth Management, Inc.          
142 South Cardigan Way, ste D                                                                                                                                      
PO Box 4446                                                                                                                                                  
Mooresville, NC  28117                      
Direct (704) 905 - 3594                                                                  

Investment Management
Retirement Services

   Sumner Wealth Management | 704.905.3594 |

Securities offered through Securities Service Network, Inc. Member:  FINRA/SPIC

If a recommendation is included in the above email, please contact me for additional investment information supporting the recommendation.

Fee based advisory services offered through SSN Advisory, Inc. a registered investment advisor  

If you don't wish to receive emails from us, please .