(New York)

The markets look troubling right now. They are just about to cross to a new high at the same time as they have just breached the record for the longest ever bull market. P/e ratios are way above historical averages and stocks have risen 400%+ (including dividends) since their lows in 2009. At the same time, there are ample geopolitical headwinds, tightening rates, and trouble in tech. Is it time to take risk off the table? Maybe, but don’t act rashly. The key is to take small, gradual, and reversible steps. If you end up being right, you will have minimized your losses, but if you end up being wrong, you won’t kick yourself from missing gains.

FINSUM: Advisors say that these kinds of strategies are well-received by most investors, so simple risk mitigation efforts can go a long way to minimizing the psychological discomfort one feels at the potential peak of the market.

(New York)

Citigroup says that the US just crossed a scary economic threshold. The bank’s well-known economic surprise index shows that the US is now at greater risk of negative economic surprises than is Europe, the first time that has occurred in some time. While the economy has been doing well, the trade war and a multitude of other factors, including the Fed, mean the US is more at risk of an economic downturn than Europe.

FINSUM: It is pretty easy to say that a country whose growth is at 4.1% is at risk of a downturn. It would not take much for the US to slow down considering its growth appears to be peaking.

(San Francisco)

Apple just crossed the trillion Dollar threshold. Shares have been rising, up over 27% this year, on strong sales figures. Everything seems good, right? Think again, says Barron’s, as it believes the stock could be in for a “clobbering”. The reason why is that Apple’s recent success with the iPhone X may have weakened its prospects for 2019. Because there is a longer and longer timeline between phones that have the dazzle to get customers to actually trade up, currently good iPhone X sales may be sapping demand for 2019, meaning the next few quarter’s earnings might be quite disappointing.

FINSUM: This makes sense to us. Customers only have so much wallet share for smart phones, and the iPhone X took a lot of that this year, which means the next several quarters could be lean.

(New York)

Advisors looking for good sources of income for clients should check out this piece, which is comprised of actual advisor ideas. Income is a tricky question at the moment, as one needs to preserve short-term income but also protect against rising interest rate risk. One key point is to focus on total return, or harvesting income not just from coupons and dividends but from portfolio gains too. While reaching for good yields in bonds can be very risky at the moment, considering sticking to traditional short-term bonds, but laddering their maturities from 1 to 5 years. Once you have that in place consider adding some higher-yielding options, like high yield municipals. MLPs are another good potential option given how strong the oil market is.

FINSUM: This is a nice range of specific ideas from other advisors. We favor short-term bonds for income right now, as yields are solid and interest rate risk is comparatively lower.

(New York)

We saw an article that caught our eye today. How does earning a 1.8% yield on cash sound? If that sounds enticing, consider putting some money in Betterment’s new Smart Saver option. Betterment is seeking to compete with digital banks, who have been boosting interest payouts recently, by offering a product for cash that might be stagnating in a savings account. The yield is backed by a mix of 80% short-term US Treasury bonds and 20% US short-term investment bonds. The only catch is that the account is not FDIC insured, which is a hindrance compared to some bank accounts which are offering comparable yields and are FDIC insured.

FINSUM: This seems like a good offering in principle. Betterment’s argument against the competition is that unlike banks, their holdings directly track the Fed instead of being artificially manipulated to optimize net interest margin.