Market Commentary

Recap In a continuation of the first quarter, stocks and bonds struggled to find any sort of traction in the second quarter, leading to one of the roughest six-month starts to a calendar year on record. As stewards of client capital, we understand how difficult and challenging these last six months have been and we continue to work to ensure portfolios are properly positioned for successful outcomes over the long term. Markets have gone through numerous ups and downs over the course of centuri

We relayed a note in late February discussing the war in Ukraine, our thoughts, a few points on markets, and associated historical reactions to similar acts between nations. We will not touch on it again here but will repeat our sentiment. The loss of human life that has occurred and may continue in the coming months or even years is extremely tragic, and we feel for everyone who will be directly impacted. Discussing markets during a period of war is always secondary, but as stewards of capita

Recap A reasonable person could sit here at the end of 2021 and have a sense of Groundhog Day – like last year at this time, COVID is dominating headlines and impacting the way we live, work, travel, and socialize. On the positive side, we also have equity markets generating robust performance. In fact, in 2021, the S&P 500 returned greater than 15% for the third straight year – you have to go back to the dot-com boom in the late 90s to see such consecutive performance, and besides then, n

In this letter: We take a break from the U.S. to focus on markets overseas by looking at a dated jigsaw puzzle. A discussion of how some rules of thumb need to adjust with changing market composition. China, and how it may not fit several emerging market prerequisites (growth and demographics). Europe and Japan are changing, just very slowly. A few notes on the debt ceiling and inflation. In my experience, kids love a geography puzzle. Give them a jigsaw of the U.S. and it will not take long

In this letter: Monetary and fiscal policy remain very accommodative, translating to elevated valuations across markets. A new industry catchword for 2021. Risk tolerance should not be forgotten when times are good. As financial asset classes continue to exhibit strong risk on characteristics, there is emerging tension between the fuel supporting such risk taking (strong) and the valuations of both equities and fixed income (expensive). The Federal Reserve remains exceedingly accommodative,

In this letter: A discussion of Modern Monetary Theory. While interest rates are back up, the rebound in risk-assets continues domestically and abroad. Global context regarding debt, deficits, interest rates, and inflation. Re-reading what we wrote last year at this time, it is amazing to see how much has changed, but also more importantly, how much has stayed the same. We ended last year’s letter with this: “We are entering a unique period where it is getting harder to lean on precedent. Li

In this letter: As 2020 ends, the contrast between solid financial markets and the ravages of COVID-19 continued Both equity and fixed income markets saw noticeable regime changes during the year The classic 60% equity/40% fixed income portfolio just had its best two-year return since 1997-1998 A year-end investment commentary typically talks on performance, valuations, levels of market indices and rates, to name a few common topics. It would be tone deaf of us, however, not to acknowledge u

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 suff

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 in U.S. history, with expectations of further pain ahead. Economist and market prognosticators search for parallels to provide context to COVID-19 but often lean on poorly drawn corollaries. Central Bank and Fiscal backsto