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For large swathes of the United States, the summer of 2023 has been scorching and many areas throughout the world have seen record breaking heat. Here are just a few records of note:
2023 has been mixed in terms of economic data but markets in the balance have been moving upward. Both stocks and bonds have seen upward movement over the past three and a half months.
While markets have been moving in the right direction, there has been no shortage of unsettling news. We’ve heard talk of recession fears, geopolitical turmoil, and issues with the banking sector. The combination of these factors along with the antecedent anxiety from last year’s decline have reinforced investor skepticism. In times of pessimism, investors can become easier marks for those who peddle investment theories that may not be grounded in sound fundamentals. For this quarter’s Insights, I thought it might be useful to review some commonly circulated ideas that may or may not be accurate.
2022 was a particularly challenging year for markets and one that investors will not remember with fondness. We saw a significant decline in all major US market indices in what was the worst year for equities since 2008. The equity indices, however, only tell part of the story. 2022’s market pain was deeply exacerbated by the challenges in the bond market. As a result of sharp and rapid interest rate increases to curb inflation, yields soared and bond prices fell precipitously. For example, longer dated US treasury debt was down over 35% in a nine-month period this past fall.
What Does Autumn Hold? Every year as we enter the end of summer, I find my thoughts turning to autumn. It’s a particularly favorite time of year for me. I love the onset of cooler weather, college football, Halloween and Thanksgiving, and the other joys that autumn brings. In the investment realm the first seven months of the year have been particularly challenging as we’ve seen high inflation, global conflict, and equity markets plunge into bear market territory. For this month’s Insights, I want to explore some of the things we’re watching closely over the next few months.
As of the time of this writing (June 13), the market crossed into bear market territory. Major swaths of the market, however, have been in a bear market for several months. A bear market is defined as a 20% decline from a market high. While no one likes bear markets, they are nonetheless a reality that investors are periodically confronted with. For this month’s Insights, I thought it would be helpful to deconstruct bear markets by reviewing how long they last, when do they end, and what are some strategies to effectively weather these storms.
For many months running, the headlines in popular press have been largely negative, particularly so in economic matters. The myopia around the negative has led many to deep economic pessimism. The tendency of news media to focus on the negative is as old as time. The old adage, “if it bleeds, it leads” is unfortunately all too common in media generally. While there are very legitimate reasons for concern, and we are not out of the economic woods, there are reasons for market optimism that are lost on many. For this month’s Insights, I thought it would be constructive to share a few of these.
2022 has dawned with heightened volatility and concerns that a prolonged market downturn is imminent. We view 2022 as a bit of a mixed bag in terms of market risk and opportunity and perhaps have a more nuanced view than many. For this month’s Insights, I thought it would be constructive to spend some time on key themes that we feel will drive market performance and our views on the same
Amidst the events of the past year, much investor focus has centered around US markets and the US economy. Often lost in this discussion is how international markets have fared and what the outlook is for international markets. International markets can comprise a part of a well-diversified portfolio and for this month’s Insights, I thought it would be helpful to provide a bit of a primer and commentary around investing internationally via a Q&A format.
As 2021 has begun, markets and asset prices have continued to march onward and upward. We’ve also seen some frenzied activity in certain individual stocks (i.e. GameStop and AMC) and in cryptocurrency. This has led some to question if this activity in the market periphery is something that they should be concerned about and/or participate in. The overall level of the market is also being called into question by some as we have seen great performance in equity markets in spite of COVID challenges and political unrest and division. In this month’s comments, we’ll explore the following themes and the considerations for investors:
As the dust has somewhat settled on a chaotic and contentious election cycle, I wanted to share some observations on the events of the past month as they relate to capital markets and your investments. At the time of this writing, the Dow Jones Industrial Average just posted the highest monthly gain since 1987 (up 11.8%) and investors continue to be amazed at market performance against the backdrop of an ongoing pandemic and related economic headwinds. Below are four observations that have been apparent over the past month:
It has become cliché to talk about 2020 as a historic and wild year, but it truly has been just that. In financial markets, we have seen record volatility and huge price anomalies. Consider just a few: