Newsletters
Market and Portfolio Update – December 2018
Equities
I think we are between the mid and late phases of the business cycle, a time when the performance of different types of investments has been historically mixed. I think that means it's not the time to abandon stocks, but it's also not the time to take big bets the way you might early in the cycle.
2018 Third Quarter Review & Outlook
Equities
After a slow a sometime turbulent first half of the year, the S&P 500 Index of large U.S. stocks surged 7.7% in the third quarter; its biggest three-month gain in nearly five years and ending near an all time high. Analysts credit the rally to investors’ faith in the growing U.S. economy, which has shown new potency this year. Meanwhile other major global stock markets’ returns for the quarter and year-to-date have been much less robust.
2018 Second Quarter Review & Outlook
Equities
So far this year market instability has been the overriding theme and has grounded stock returns. U.S. stocks struggled in the past three months over investors’ concerns about trade tensions, political uncertainty in the Eurozone and signs of slowing global economic momentum.
2018 First Quarter Review & Outlook
Equities
After one of the strongest-performing Januarys in over two decades, equities began sliding in February with the Dow Jones Industrial Average suffering its first 10% correction since early 2016. The sudden fall was driven by several factors; including Federal Reserve rate hike fears—sparked by evidence of inflationary wage pressures and a more hawkish change in leadership at the Fed—and escalating trade war tensions ignited by the Trump administration.
Market and Portfolio Update - February 7, 2018
The Long Awaited Market Correction
The recent sudden and significant drop in global stock markets has many investors on edge. With memories fresh of continuous equity highs, retail “mom & pop” investors as well as professional money managers seemed to be caught off guard by this stock market correction of about 10%. Not us. As written in our Year-End 2017 Investment Insights: “... while we are “running with the bulls” for now, we are still somewhat cautious (with lower stock positions than normal) compared to other upbeat money managers ... This is in light of high stock valuations and the potential for lower returns going forward, along with rising interest rates and possible declining bond prices.”
2017 Year-End Review & Outlook
Equities
The stock market climbed significantly in 2017, posting its biggest annual gain in four years and extending a bull market that began in 2009—now the second-longest in history. Powering the market's double-digit rise was a synchronized economic expansion that reached every corner of the globe. The Dow Jones Industrial Average barreled past several 1,000point milestones during the year at the fastest pace since its creation in 1896, hitting 71 records along the way. It topped 20,000 a few days after President Trump took office in January, and eventually shot above 24,000 on November 30. (As of this publication, the Dow has now passed the 25,000 mark.)
2017 Third Quarter Review & Outlook
Equities
The U.S. stock market posted solid third-quarter gains as upbeat news on the global economy overshadowed a steady stream of negative news ranging from catastrophic hurricanes to cyber hacks and war chatter between the Trump administration and North Korea. The S&P 500 Index rose 4% since June 30, notching its eighth consecutive quarterly advance. The Dow Jones Industrial Average added 4.9% in the past three months, posting its longest streak of quarterly advances (also eight) since 1997. This blue-chip index is up 13% this year. Stock market gains also continued to be broad internationally, spanning many regions and sectors.
2017 First Half Review & Outlook
Equities
Global stock markets collectively had their best opening half in years. All but four of the 30 major indexes representing the world’s biggest stock markets rose—a first six-month performance unmatched since 2009 according to The Wall Street Journal. In the U.S., the Dow Jones Industrial Average and S&P 500 Index each rose 8%, despite President Donald Trump’s challenges with the media and advancing his political agenda. Investors attribute the broad breadth of the rally to strengthening corporate earnings, improving global economies and continued support from foreign central banks. High stock valuations and tranquil trading this year have prompted concerns that investor complacency is setting in. Federal Reserve Chairwoman Janet Yellen warned that asset valuations were “somewhat rich.” The S&P 500 Index trades above 18 times projected earnings over the next 12 months, around its highest level in 13 years. Still, this is well below the 26 times forward multiple reached at the dot-com bubble’s peak in 2000, according to FactSet.
2017 First Quarter Review & Outlook
Equities
The U.S. stock market posted its biggest quarterly gain since the last quarter of 2015—extending the fourth quarter post-election rally—lifted by a brightening economic outlook and rising confidence among businesses, consumers and investors. The Dow Jones Industrial Average posted a 4.7% gain, while the broad S&P 500 Index jumped 6.1% over the past three months. Despite a range of uncertainties across the globe including elections in Europe and a fledgling Trump administration, the first quarter of 2017 was the least volatile in more than half a century. The CBOE Volatility Index (known as Wall Street’s “fear gauge”) recorded its second lowest quarterly average on record, according to the WSJ Market Data Group.
2016 Year-End Review & Outlook
Equities
U.S. stocks shook off a poor start for the year to log its best performance since 2013. Stocks weathered several shocks in 2016, including a possible global recession scare during the first quarter, Britain’s surprising vote to exit the European Union (Brexit) in the second quarter, and the shocking election of Donald Trump in November. The bulk of 2016’s gains came in the second half of the year. A rebound in corporate earnings, accelerating U.S. economic growth and stabilizing oil prices helped stoke investor enthusiasm for stocks. The rally gathered pace after the election of Mr. Trump as investors bet the new administration would usher in business-friendly policies such as tax cuts, looser regulations and fiscal stimulus such as infrastructure spending.
Market and Portfolio Update November 2016
U.S. stock indexes this Wednesday after the election were trading higher, paring steep pre-market stock futures losses, after an early-morning astonishing victory by Republican candidate Donald Trump over Democrat Hillary Clinton. This was preceded by fearful trading overnight in foreign markets (especially in Asia). After initial post-election market jitters, traders now appear to be evaluating the potential economic benefits from Trump's plans to cut taxes and spend money on infrastructure projects that would put Americans to work. This has seemed to calm the U.S. market for now.
