Investment Update - April 2018

During March, equity markets-suffered their second consecutive 10+% decline; this following an unprecedented 15 consecutive months of monthly gains. Your portfolio has been partially hedged by our holdings in Treasuries, Gold, and Cash - all of which showed positive returns for March. In our view, investment markets are getting used to the new normal ... that being more volatiJi-ty as investors begin to adjust to this new environment. We can all speculate as to the reasons for the increased volatility; some would say the potential China bade war, others, the conflict in Syria, or contentions with North Korea and Iran, to name just a few. While these all are certainly having an impact on equities, we believe there are three other, possibly more important, drivers for our recent ··market unpleasantness; rising household and corporate debt, rising deficits, and the Fed now doing an about-face on monetary policy - going from money printing ( quantitative easing) to quantitative tightening. With quantitative tightening, the Fed is now removing•' money from the banking system. So, here in 2018; the bottom _line· - m our. opinion - is that we have fewer dollars chasing investments of all kinds: real estate, stocks, and bonds.

When we wrote you in Febrnacy, we ·said that this market correction would take a wliile to fully play out. Today finds us at a point - right ahead of first quarter earnings releases (which we expect to be positive) - where equities may well attempt to rally. If, as we expect, our proprietary trading indicators tum positive, we will be putting some of our over-weighted cash position to work for you in equities.

Thanks for your patience. I know this has been a rocky ride thus far in 2018. We are now guardedly optimistic that this recent volatility will be resolved to the upside for stocks and stock-based mutual funds.

I'll be talking with you again shortly; in the meantime, if you have any specific questions about your portfolio, please don't hesitate to call me on 1-804-965-0707.

Gary W. Wood, CFP®
President, BDC Capital Management, Inc.

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BDC Capital Management, Inc. is an Independent Financial Advisory Firm.

**The information contained in this newsletter does not purport to be a complete description of the securities, markets, or developments referred to in this material.  The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Any opinions are those of BDC Capital Management, Inc.  Expressions of opinion are as of this date and are subject to change without notice.  BDC Capital Management may in the normal course of business have a position in any securities mentioned in this newsletter.  Any stock price mentioned is quoted as of the date of this newsletter.  This information is not intended as a solicitation or an offer to buy or sell any security referred to herein.  Investments mentioned may not be suitable for all investors.  Past performance may not be indicative of future results.  Keep in mind that individuals cannot invest directly in any index.  Gold is subject to the special risks associated with investing in precious metals, including but not limited to:  price may be subject to wide fluctuation; the market is relatively limited; the sources are concentrated in countries that have the potential for instability; and the market is unregulated.  There is no assurance that technical analysis or any strategy will ultimately be successful or protect against loss.

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For I know the plans I have for you," declares the LORD, "plans to prosper you and not to harm you, plans to give you hope and a future.  Jeremiah 29:11 (NIV)