Wealth Protect Status Update: June 2017

This is the monthly WealthProtect System* status update and includes the probability (Low, Mid, High) of a change in status within the next two months. Below is a commentary on actions taken this month as well as changes in overall asset allocation.

System Commentary

Continued weakness in real assets forced an exit from Natural Resource equities and energy infrastructure equities resulting in our most conservative position since late last summer.

Market Commentary

While US large cap equities and foreign equities in general continued to have strong relative performance, other asset classes weakened over the past month. Real assets in general continued to lose ground except for Real Estate Investment Trusts which gained as bond yields fell. Even US small company stocks continued to be relatively flat. My impression is that while headline US stocks (the part of the iceberg above the water) have continued to perform well, the majority under the water are struggling. This often happens before the rest of the market turns sour (to be fair, it also many times means nothing).

US stocks remain overvalued by all reasonable measures. The contrast you have in the market is one in which US large caps are indicating all is just fine, but the remainder of the market and, very importantly, bonds (as indicated by their dropping yields) are indicating not all is well. Since the summer tends to be bumpy for stocks, it is unlikely this is a good time to chase "hot stocks." Sticking to a rules-based strategy, while frustrating at times, we believe gives an investor the best chance of growing and protecting their wealth.

*The Armstrong Wealth Management Group WealthProtect System is an investment risk control system designed (but not guaranteed) to limit significant losses in major bear markets (excess of 30% loss from market peak to market trough). It is NOT designed to prevent normal market losses (under 20%). No strategy can assure a profit or protect from a loss. Occasional false signals can reduce returns.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Stock investing involves risk including loss of principal. The prices of small and mid-cap stocks are generally more volatile than large cap stocks. All indices are unmanaged and may not be invested into directly.

International and emerging market investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

Investing is Real Estate Investment Trusts (REITs) involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained.

The fast price swings in commodities will result in significant volatility in an investor's holdings.

All performance referenced is historical and is no guarantee of future results.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio.

Diversification does not protect against market risk.

The forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.

The Standard & Poor's 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

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