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Checking in, markets rocky? ...
Can Bitcoin buy peace of mind in 2018?
Dear Zachary , 

It’s that time of year where things are really starting to ramp up again, spring & summer plans and so on. And for some the New Year’s resolutions are starting to appear more daunting and difficult to keep up, some have not made any “resolutions” (just hanging out and “chillin” as my son would say), and some are striving and thriving toward their goals and milestones set at the beginning of the year!

If you are not on the track you would like to be on, with your weight, fitness, savings plan, reading schedule, etc., whatever it may be, don’t beat yourself up! Just get in motion (today) towards that milestone or goal, do one thing each day to get you closer, creating momentum for yourself and those you love for 2018 and onward. 

Most importantly, focus a moment each day on something (anything) you are grateful for, share it (out loud) with someone, and with this one small daily ritual, it will likely turn out to be a great year!

I borrow a military term occasionally, “it’s a VUCA world” (VUCA=Volatile, Uncertain, Confusing, Arbitrary). The decline in the markets ending the week of Feb 2nd (last week) and continuing this week have jolted a few, and I would say that this as well as other world events and USA news definitely fit into this VUCA concept.

In an effort to make it easier to “rest easy” in these VUCA times, I offer the following thoughts and comments from our experts;

First, some summary comments and thoughts on the 2018 year ahead, through the eyes of one of our institutional asset managers.

Economic Growth to Accelerate- Corporate tax reform, an accommodate Fed, a healthy U.S. energy sector, and increased business and consumer spending will drive long-term growth.

Risk of a Recession Remains Low- The new Fed is expected to continue to raise interest rates slowly, but a return to a normal rate environment should do more to help than hurt the economy.

Entrepreneurship & Innovation to Continue- The economic tailwinds that will drive the long-term growth in the U.S. are stronger and will last longer than the headwinds.

In other words, the experts say all should go well this year ahead…
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Contact Information 

Goldbloom Wealth Management, LLC

Phone: (206) 528-2001

Fax: (206) 686-3114

(Main Office)
11808 Northup Way,
Suite 100
Bellevue, WA 98005

(By Appointment Only) 
451 SW 10th Street, 
Suite 105
Renton, WA 98057 

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Next, regarding the recent stock market decline, after a period of unusually high returns and low volatility, as you may have heard...US stocks fell sharply in the week ending February 2, and this week through Thursday at this writing time, fell a bit further.

Some further summary thoughts on this recent sharp decline, from another institutional asset manager we utilize, with their comments focused on this specific near term activity.

• Stocks have been hit by fears of U.S. interest rate hikes. Part of the reason for the current volatility in the stock market is the prospect of the Federal Reserve raising U.S. interest rates perhaps four times this year, stopping the flow of cheap money more precipitously than previously expected.

• At the same time, the bond market has seen rising yields as investors are increasingly concerned about inflation. Rising yields are traditionally seen as negative for stocks as they increase companies’ borrowing costs.

Let’s refocus on the facts:

• Investors have enjoyed two years’ worth of returns in a span of just three or four weeks. Those are not sustainable price moves, so this kind of volatility is normal and should not come as a surprise to investors. We have talked about how the volatility index (VIX) has been running well below normal and, like a compressed spring, it could abruptly return.

• To speak to the larger point, market returns are driven primarily by corporate earnings and broad economic growth. Global growth continues to be strong, while earnings season has delivered good results from companies around the globe. The positive relationship between stronger global economic growth and revenues, with corporate earnings supported by improving pricing power, supports margins.

• Monday’s ‘sell-off’ does not change this; we expect strong earnings growth to continue, with central banks being careful not to upset the apple cart.

In other words, the experts say all should be “OK” despite the recent sharp declines…

So understanding the comments above for 2018, and the decline in recent week(s), the comments are simply logical. Remember no one, even those with a “working” crystal ball, can predict the future. It is a VUCA world, so logic does not always prevail. Please remember, these comments are not intended as investment advice, with or without a crystal ball. I am glad the experts are feeling comfortable. That being said, I remember pre -2008 when the experts were comfortable as well...

A quick reminder, just like you experienced if you were served by us in 2008, we use a "wealth preservation" approach. As a client of ours (GWM) you/your family have a plan in place. A plan to address whatever is coming, so enjoy these days, regardless of market volatility, and please reach out to connect with us if you have any concerns.
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And back to the title, can “peace of mind” be acquired with Bitcoin? Due to my role and background, I receive periodic inquiries with these “cashless society” type of questions. Bitcoin is a hot topic in today’s newspapers, and a source of questions. What does a Bitcoin look like? Or what is a Bitcoin?  Etc.

The short answer, Bitcoin is a “digital currency”. I do not consider Bitcoin an investment (an investment as defined by something that can generate a return). Bitcoin is more like gold, or an antique, that you buy and hold in a speculative manner, till it raises (or lowers) in value. Gains and losses are taxed as capital gains/losses. To learn more about it, read the attached recent article by Mike Sorrentino, Chief Investment officer at Global Financial Private Capital.

In closing, a special day for many is coming soon, Valentine’s Day. Some of us are lucky enough to enjoy this day, and some of us are feeling a loss at this time. But everybody can celebrate this day and be grateful for the friendships and other relationships they enjoy. Keep that in mind, and make it easier for everyone to have a Happy Valentine’s Day by spreading some kindness where it may be needed at this great time of year.

Best Always,
With Gratitude,
Steve Goldbloom

*VIX is the ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market's expectation of 30-day
volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options.