2021 Looking Past the Pandemic

We spent many hours at the end of 2019 trying to figure out what could derail one of the greatest markets in history. Most investors’ biggest concern going into 2020 was the upcoming election and what a potential change in Washington leadership would mean for the markets. Of course, no one predicted a global pandemic causing a global recession. Fortunately, it was the shortest recession and fastest market recovery in history. Please click HERE to continue reading our 4th Quarter Newsletter.

A Blue Wave?

The COVID-19 crisis has resulted in the deepest downturn in global economic activity in the post-war era, but almost certainly the shortest recession. US stocks have rebounded over 50% since the March 23rd lows and the S&P 500 is now up over 5% through three quarters. Historically, the 4th quarter is the strongest quarter of the year, but there are some potential headwinds going into year-end. The largest concerns that we are hearing from clients surround the election and what it will mean for their investments. Please click here to continue reading our 3rd Quarter Newsletter.

Transformative Platforms

As investors continue to grapple with the near-term issues impacting global markets, we believe there is disruptive innovation happening simultaneously and could be the transformative innovation platforms that can drive the economy out of a potential recession and power growth for many years in the future. The key areas are (Source: Ark Investments):

  • Artificial Intelligence
  • Robotics
  • Energy Storage
  • DNA Sequencing
  • Blockchain

Please Click Here to Continue Reading our 3rd Quarter Market Commentary

Yield Curve Inversion

On August 14th, the 10 year Treasury Yield went slightly below the yield for the 2 year Treasury, the first time this has happened since 2007. Economist pay close attention to the 10 year vs. 2 year Treasury yields, as its historically been a strong predictor that a downturn is on the way. The yield curve has inverted before every US recession since 1955, although it sometimes happens months or years before the recession starts. The average time between the last 5 yield curve inversions and a recession was 17 months. This lead time is the key and its still very uncertain how long a lead time we may have in the current economy before there is an actual recession. That said, an inverted yield curve, like most other indicators, is not perfect and doesn’t mean a recession is imminent.

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Storm Clouds

Despite what some people may say, no one really knows the exact reason as to why the market has pulled back so ferociously, but what we do know is that in any given year, the market normally has 3 drops of over 5%. This is the 2nd drop this year after zero in 2017. In other words the market generally goes up over time, but can take a step back or two at any moment. That said, markets tend to move in cycles and we must be cognizant of where we are because, as cycles get longer, pullbacks tend to become more frequent and more severe.

Please click here to read our 3rd Quarter 2018 Market Commentary

How to Handle a More Volatile Market

Everyone has a plan until they get punched in the mouth.” -Mike Tyson

While we are bullish in the short term, we remain cognizant of where we are in the cycle and are preparing ourselves for what a down market may bring. Having a plan in place beforehand helps control emotions and ultimately leads to better investment decisions. In this latest newsletter, we’ve taken a look back at this past quarter, some of the things that are causing the choppiness in the market: tariff talks and rising interest rates, and how we are preparing for a more volatile market environment.

Click here to read our 2nd Quarter 2018 Market Commentary