Investor Insights

August 2017 Investor Report

Published: August 4, 2017Updated: April 25, 2019

In the months of June and July, we saw strong performance across our portfolios. This was largely lead by the price appreciation in crude oil prices, which stimulated our energy sector bonds. Additionally, many of our positions have started paying cash into their accounts, providing continuous cash flow into your account whether you are looking for income or growth. For the income investor, we would transfer the money into your checking account. For growth investors, the increased cash will provide for more investment opportunities in the future.

With healthcare reform in the rearview mirror, Senate Republicans are now discussing tax reform. When Congress returns from their August recess, this will be the most important focus of the legislative agenda. Speaker of the House Paul Ryan introduced a Border Adjustment Tax in his early version of a tax bill. Senate Republicans showed little interest in this proposal based on the Border Adjustment Tax, with Senator Tom Cotton (R‐AK) being particularly outspoken. Speaker Ryan has since eased away from pushing the Border Adjustment Tax. The likelihood of passing tax reform through both chambers at this point looks to be around 50%. This is due in part to the fact that many of the goals of tax reform were predicated on the successful passage of a healthcare bill which, as mentioned, did not materialize.

Members of the Freedom Caucus and the Tea Party oppose any measure that increases deficit spending and reducing taxation will prove nearly impossible in the absence of a bill curbing healthcare spending.

As the dysfunction continues on Capitol Hill, we continue to monitor new opportunities for possible investment. We are excited with this month’s new additions to your portfolio and believe there is good value presented.

As we enter the months of September and October, which have historically been difficult for the equity markets, we will monitor developments and provide our insight on investment strategy appropriate for the prevailing conditions. As always, please feel free to reach out to us with any questions that you may have. We are grateful for the trust that you place in us.