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Market Recap

While domestic and geopolitical concerns continued to make daily headlines, the major stock market indices experienced another positive quarter. The 3rd quarter extended the upward momentum, allowing equity investors to continue enjoying solid returns for 2017.
Political stories dominated the headlines during the 2nd quarter, but investors were the beneficiaries of another set of solid gains for the major market indices although the ride was somewhat bumpy. Stocks were strengthened by good corporate earnings, the prospect of possible tax cuts, and strong economic numbers in the foreign markets. This extended gains from the 1st quarter, with the Dow’s YTD change at 8.03% closing at 21,350. The S&P YTD change through 6/30/17 was 8.24% closing at 2,423 while the NASDAQ was up 14.07% closing at 6,140 for the same time period.

Investing & Economic Commentary

With recent market volatility, we are rolling up our sleeves and looking for bargains. Over the last week, we took the opportunity to liquidate both our Honeywell International (HON) and Autozone (AZO) positions, as they had exceeded our estimates of fair value.
Your team at Kays Financial likes to purchase businesses that benefit from long-term structural trends, so long as said businesses can be acquired at attractive prices. We think TE Connectivity (TEL) fits this bill reasonably well, and as such, we have recently added TEL to individual stock portfolios.

Financial Planning

The Tax Cuts and Jobs Act (TCJA) was passed in late 2017 making changes to several income tax provisions like brackets, standard deductions, personal exemptions, and corporate tax rates. . A relatively unknown provision included, which garnered bipartisan support (a rare thing, indeed), is Qualified Opportunity Funds (QOF).
Investing internationally has become a standard method of diversifying the return streams of an investment portfolio. Rather than being subject merely to performance of the domestic markets, such as the S&P 500 or Dow, diversifying internationally is supposed to provide investors with a smoother stream of returns over time.