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While the Treasury curve has continued to exhibit a flattening trend, taking it closer to an inversion, the municipal curve has marched to a different beat, even steepening slightly in 2018. The difference is apparent, especially when using a tax adjusted municipal curve to get a taxable equivalent. In fact, the relative slope between Treasuries and municipal debt is hovering around a record high, leading us to believe that municipal bonds are an attractive option for taxable investors relative to other fixed-income opportunities.

Women continue to make great strides in wealth. However, a general theme emerges across research revealing women are still restricted by their own lack of confidence in terms of financial knowledge and the approach to investments, risk, and their role in a business. Given that most women will have sole responsibility for their wealth at some point in their lives, it is critical for women to take ownership of their wealth.

The volatility in the markets at the end of 2018 raised concerns about the outlook for 2019. Investors may have worried that sources of support were “beyond the peaks”—peak liquidity and then, probably, peak growth in GDP and corporate earnings.

Investments into qualified Opportunity Zone Funds offer attractive tax benefits, while catalyzing capital inflows into economically distressed communities. However, prudence is necessary in evaluating these investment opportunities as they come to market.

Studies have shown that investors who engage in market timing must achieve a minimum of 70% accuracy in predicting market moves. Even the best “market gurus” who engage in market timing fell far below that level. So what does work for investors who want to avoid losing money during an equity market downturn?

The Democrats regained control of the House of Representatives, and the Republicans added to their majority in the Senate. The prospect of a divided Congress, especially in the current hyper-partisan era, is likely to mean very little new legislation enacted in the next two years. Legislative gridlock is generally considered a positive for markets, since it reduces uncertainty. Nonetheless, the Trump administration’s unconventional approach to governing is likely to keep things interesting.

Investors may be feeling a bit skittish as talk has shifted to rising rates, slowing economic growth, and growing geopolitical risks. A neutral allocation to equities still seems appropriate for 2019, but the risks are rising. A key question going forward is whether the recent volatility marks an intermission of the nearly decade-long bull market or if it represents a turning point. We think the former, but the second act may be far shorter than the first.

A hot U.S.

The passage of the Tax Cuts and Jobs Act passed in 2017 overhauled several cornerstones of the Internal Revenue Code and introduced new tax law, including section 1400Z-1 and section 1400Z-2 which address the qualified opportunity zones (QOZs). The business community, specifically real estate investors, has viewed the QOZ as a possible turbocharged vehicle to stimulate economic development in low-income communities throughout the United States. However, the impact of the new code sections has been hampered by key questions on how to apply the provisions.