What Worked In Q3

Stocks fared well during the third quarter despite September’s weakness, with the S&P 500 Index returning about 9%. The quarterly gain brought the return through the first nine months of the year to 5.6%. Here we peel back the onion on the third quarter’s stock performance to look at what worked and what didn’t. Read more

Retail Sales Beat Shows Consumers Coming Back Strong

COVID-19 has decimated global demand as lockdowns materially re-shaped consumer and business behavior. Even as states have begun to re-open, significant questions remain about how demand could recover. The May retail sales print provided one of the first glimpses of that answer, rising 17.7% month over month and marking the largest monthly gain since data began in 1992. Read more

3.15.20 Bear Market Communication

I hope this finds you and your family doing well!

Part of our communication protocol is to reach out to you when the equity markets enter bear market status – down more than 20% at closing from a previously established high. We did that near the end of last week on both the Dow Jones Industrial Average and the S&P 500.  You will note that we sent a similar communication when we entered correction territory (down 10%) on February 28th. The S&P 500 needed only 16 days to go from a new all-time high, on February 19th, to a bear market, resetting the previous record of 28 days.

You may be wondering why it’s called a bear market.  The term bear market gets its name from the way a bear attacks its prey, swiping its paws downward. Similarly, the bull market, an upward trending market with an absence of a 20% decline, gets its name from the way a bull attacks, thrusting its horns into the air. The present bear market brought to an end the longest bull market in history at just over 11 years, almost to the day.  And here’s the kicker… both bull and bear markets are arbitrary, made-up numbers to fit nicely in a box so we can understand them. To me, the decline we experienced from September to December of 2018, down 19.8%, sure felt like a bear market, although it did not technically qualify.  And, neither did April to December of 2011, when the equity markets fell 19.4%.   At this point, the definitions are irrelevant. The fact is the markets are down and so are our accounts. Read more

Low Valuations Imply Better Long-Term Performance

The dizzying volatility over the past few weeks has left all of our heads spinning as we wait for containment efforts in the United States and elsewhere to help slow new cases of COVID-19 (coronavirus). Public health is of course our primary concern. But beyond that, from an economic and market perspective, there are many difficult but important questions: Read more