Q1 SMART MONEYINVESTMENT INSIGHTS

Prepared by:Brandon Masbruch

JANUARY 2020 MIDWEST FINANCIAL GROUP

Vice-President/Chief Investment Officer

Certified Financial Fiduciary®

CPFA, NSSA®

1806 Seminole Hwy., Madison, WI 53711(608) 807-4775

As the excitement of a new year passes andwe begin to move into our normal routines, itis easy to focus on today and the concerns oftomorrow and forget the lessons of the past. As I write this, we are creeping up on the 11thanniversary of the market bottom in thefinancial crisis, we are creeping up on the20th anniversary of the dot-com bubble andone of the few multi-year market downtrends in its history, and we also sit at the oneyear anniversary of what was a prettynervous holiday week for investors followingthe pullback at the end of 2018.  But let’s setall those history lessons aside and focus onwhat has happened since my last note.  Wefinished the 4th quarter of 2019 setting alltime highs in most US indexes. We saw whatlooks to be the framework for easing tradetensions, we saw the impeachment of thepresident, we saw continued marketvolatility, and most importantly we saw all ofreasons that a safety-first plan has so muchvalue. 

For those of you that are currently drawingincome, we felt our preservation portfolio met its2019 goal. We have aimed to protect at least 2 ½years of your income as you near the distributionphase of life, with the goal of not being forced tosell stocks in down markets.  We will seesignificant down markets again; it is a fact that wecan’t ignore.  We also cannot forget that therearen’t any flashy blinky signs that let you knowthat it is going to happen, nor is there an advisor,investment, manager, algorithm, or magic 8 ballthat can predict when market conditions willchange, up or down.  The truth is by the time youknow you are heading for a major down market;you are already there.  These are simple truthsthat we must embrace, and if we do, and if wecontinue to build your portfolio from the groundup, we will be able to work through anything themarket may throw at us. 

By the time you receive this letter you will havealready, or are about to receive, your tradeconfirmations from the January 2nd portfoliorebalance.  Much as will always be the case youare only going to see minor changes to theportfolios.  We are moving up the market-capscale, which means that we will be more balancedbetween large, mid-size, and small companies, in2020.  For the last several years we have had aslight overweight to small companies, which overtime will yield proportionately greater return, butalso with a greater amount of volatility.  Outsideof that adjustment we remain committed to beingUS centric in our investment thesis.

These are simpletruths that we must embrace

1806 Seminole Hwy., Madison, WI 53711(608) 807-4775

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Q1 SMART MONEYINVESTMENT INSIGHTS

The US dollar remains strong, and as the reservecurrency of the world, will most likely continue to bestrong in 2020.  It is an election year, and we aresomewhere near the end of this bull market cycle,which means we will continue to see volatility in 2020,but historically brings continued positive returns withit.  While the media, and the candidates, will try andconvince you this year that the election is about thesurvival of our society, it is more likely to be a non-event as it relates to the markets and your financialfuture.  My advice for surviving the volatility ahead ofus is simple.  Ensure that your financial plan has beenupdated, ensure that you come in for your reviewappointments, ensure that changes in your goals andplans are reflected in your financial plan, and ensurethat you stop every now and then to smell the roses. The future is not promised, and its outcome isuncertain; but if we remember the lessons of the past,focus on our goals of the future, and enjoy the presentas the gift that it is, everything else will fall into line.

Surviving volatility

In addition to these quarterly notes,we will also be adding additionalinformation and market commentaryto our NEW website, coming early2020.  You’ll be able to check inregularly for updates as they becomeavailable.  So, keep your eye out foran announcement on our NewWebsite coming soon!  And as always,please let us know if you have anyquestions or concerns and theMidwest Financial Group Team willbe here to support you. Take Care.

Securities and advisory services offered through Commonwealth Financial Network, member FINRA/SIPC, aRegistered Investment Adviser.  Fixed insurance products and services offered through Midwest Financial Group orCES Insurance Agency. Certain sections of this commentary contain forward-looking statements that are based on our reasonableexpectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of futureperformance and involve certain risks and uncertainties, which are difficult to predict. Past performance is notindicative of future results.  All indices are unmanaged and investors cannot invest directly into an index.

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INVESTMENT INS IGHTS PAGE 3

Q1 SMART MONEYINVESTMENT INSIGHTS

Q1 SMART MONEYINVESTMENT INSIGHTS

JANUARY 2020

Securities and advisory services offered through Commonwealth Financial Network, member FINRA/SIPC, a Registered Investment Adviser.  Fixed insuranceproducts and services offered through Midwest Financial Group or CES Insurance Agency.

Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions.

Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Pastperformance is not indicative of future results.  All indices are unmanaged and investors cannot invest directly into an index.

®