Perspectives

This year has been another good year for the S&P, with a year-to-date total return of 9.9% (as of 6/28/17). Investors are asking, “How have I done versus the index?” thinking predominantly of return and not risk. Very few investors are asking, “How am I protected against the next recession.” The memory of 2008, or 2000 to 2002, or 1973 to 1974, etc. is fading. A recent survey conducted by GoBankingRates found 68% of respondents said their portfolio strategy “DOES NOT ACCOUNT FOR TH… View More

August was a choppy, but essentially flat month for the markets. The price return of the S&P 500 was -0.19%, the Dow Jones Industrial Average was -0.07%, and the Nasdaq’s price return was 1.59%. The Barclays Aggregate Bond Index was up about 0.67%. As for volatility in the markets, the VIX hit its year-to-date high on August 11th, climbing nearly 70% higher than where it started the month. Much of the increase in the VIX can be attributed to the tensions with North Korea, and certainly som… View More

As we approach the end of the ninth year of what may be the world's least loved economic recovery, we continue to hear one question repeated, "When do you think it will end?"  And with the media publishing articles like this: "There's more than a 60% chance of a global recession within the next 18 months, economist says."1 "This market indicator has predicted the past 7 recessions.  Here's where it may be headed next."2 "Next recession will hit during Trump's first 2 years."3 "The Stock Ma… View More

With the stock market at its current level, a recurring question many investors have is when will we reach the top, or are we there already? In answer to this question, we believe the market will continue to climb. Consumer confidence continues to be strong and the data can be validated across multiple data sources, like the level of voluntary separation from employment (which is at levels not seen since the early 2000's), the savings rate (which has dropped, typically indicating a higher level … View More

Looking back on the last four months, to many of us it feels like the stock and bond markets have been run through the ringer. However, it really hasn’t been nearly as bad as it feels. We have certainly seen some big intra-day moves, but they have been both positive and negative. As of April 30th, the Dow Jones Industrial Average is down 1.6%, the S&P is down 0.4%, and the Nasdaq composite is up 2.7% for the year. In the bond market, the Barclay’s Aggregate Bond Index is down 2.4%, the S… View More

May Market Update In our January 2018 commentary, we stated that, "the S&P 500 is well above its historical average, but high valuations do not mean bear markets."  We further stated, "while these (years when the market is above its historical average) were not the market's highest returning years, compared to the 10-year Treasury, currently at 2.48%, it still looks attractive."  Reviewing the year to date numbers, as of May 31, 2018 the S&P 500 was up 2.0% whereas the Barclay's Aggre… View More

With the mid-term elections approaching, an ongoing tariff war with China, and an apparent soft patch in Europe, we continue to ask ourselves the question of whether we’re on track for the longest expansion in U.S. History or at the end of the road. To help answer this question, we look at various economic data points to understand the US economy’s trajectory.  During the month of June, we saw robust employment gains in the US with 213,000 new jobs.  Coupled with the growth in jobs, US wa… View More

U.S. equities finished higher last week (S&P 500 +2.5%), closing above the 4000 level for the first time since early December. The path of least resistance remains higher even though earnings season continued to undershoot expectations. Best sectors were consumer discretionary (+6.4%) and technology (+4.1%); worst sectors were healthcare (-0.9%) and utilities (-0.5%).   4Q Reporting Season Continues To Underwhelm The 4Q reporting season continues to underwhelm with earnings growth expec… View More