Market Commentary

A Full Troop of 800-Pound Gorillas: Elections, Taxes, COVID-19, and the Markets In this letter: Without statistical support, political party and tax regime changes have not translated to discernable market performance. Global fiscal and monetary stimulus during COVID already far surpass what the world saw during and after the Great Recession. Equity and credit markets domestically and abroad continued to shrug off headlines, helping recoup some if not all of the losses from earlier this year. Anchored short-term interest rates helped investment grade fixed income yet another quarter. We habitually write about the folly of investing based on headlines. Shocks,…

At A Glance Volatility from the first quarter bled into the second, though this time to the upside. Equity markets staged a strong rally in Q2 2020 with US markets up anywhere from 15%-25% and international markets slightly behind but still up double digits. The long-anticipated rotation from growth stocks into value showed some fits and starts in Q2, but growth stocks still ended Q2 ~25% ahead of value YTD. Fixed Income markets rallied as well, especially the riskier credit markets that suffered heavily in Q1 2020. The continued dissonance between the strength of the financial markets and the worsening…

There is no way to cover everything in one letter. There never is. Many of you have likely read enough about coronavirus at this point to exercise every last rational and irrational fear you already harbored. Instead, we want to provide context on the situation while also highlighting where common parallels fail. In this letter: A rush for the exits drains liquidity from most equity and fixed income markets resulting in a rapid and significant sell-off that rivals some of the worst we have witnessed in the past 100 years. A global pandemic ends one of the longest economic recoveries…

The last time a balanced 50% stock/50% bond portfolio performed better than in 2019 was back in 1997 Market observers have a mixed track record on short-term (1 year) predictions but much better on a longer term (10+ years) Those longer-term market projections suggest more tepid performance for a balanced portfolio over the next decade than what was enjoyed over the most recent 10 years and especially over the last year Politics can lead to sub-optimal decision making – make portfolio changes, if desired or needed, because of your financial circumstances and where you are versus your financial goals; we…