Market Views

JUL 2019

US equities started the second quarter by continuing the powerful rebound that began in the last week of December. The market, as measured by the Standard & Poor’s 500 Index, set new highs at the beginning of May. Economic growth concerns led to a market sell-off later in the month followed by a rapid rise and new all-time highs in response to the Federal Reserve’s signals that further interest rate increases were on hold. For the first six-months of 2019, the S&P 500 returned +18.5%. Stocks of smaller and international companies returned somewhat less. Details are found in the near-by Market Indicators chart.

APR 2019

In the first quarter of 2019, US stocks continued a rebound that began in the last few days of December. As measured by the Standard & Poor’s 500 Index, stocks returned +13.7% for the quarter and recovered all but 3.3% from the highs of late September 2018. Small company and international indexes also rebounded. Details are shown in the Market Indicators box to the right.

JAN 2019

Increased uncertainty caused equity markets to end the year on a weak and volatile note. US economic growth is healthy but fragile as headwinds develop and the risks of a slowdown increase. We discuss the effects of the rapid growth of corporate debt. Although hard to do in difficult markets, we believe the discipline of adhering to long term allocation targets will benefit investors in the long run.

OCT 2018

The US stock market jumped to record highs during the third quarter. The advance was driven by strong earnings growth and continued economic expansion. The Federal Reserve continued their plan of gradual rate increases. Major changes were made to the Standard and Poor’s economic sectors at the end of the quarter.

JUL 2018

US equity markets produced attractive returns in the second quarter. The Federal Reserve increased short-term interest rates. Trade tariff rhetoric escalated but thus far actual tariff implementation has been limited.

APR 2018

Stock prices ended the first quarter down slightly from their year end values. Price volatility is back, a sharp change from the quiescence of 2017. Short and intermediate term interest rates continue to rise. A negative yield curve, with short term rates higher than long, is a possibility, with the Federal Reserve projecting seven short term rate increases over the next three years, and a yield curve already pretty flat. Below we answer some questions we have been hearing from clients.

JAN 2018

Stocks advanced to new highs in 2017 as global conditions strengthened. The US economy is healthy but showing signs of maturing. Investors should continue to rebalance portfolios to maintain long term asset allocation targets. We highlight several features of the new tax law changes.

OCT 2017

US stocks again reached record highs during the third quarter of the year. The US economy continues its moderate growth path. The Federal Reserve is beginning the difficult process of unwinding the stimulative policies put in place after the financial crisis. A massive security breach renewed concerns of cyber‐crime.

JUL 2017

Stock prices continued a steady, low volatility, march higher in the second quarter. With valuation levels somewhat above average, investors may be too complacent. The Federal Reserve seems intent on increasing short-term interest rates even in the face of very low inflation and economic growth. The eventual transition from the current low interest rate period to more normal rates may be painful for less-cautious investors but will likely lead to a period of stronger productivity and economic growth.

APR 2017

US stocks continued their strong performance into 2017 and ended the first quarter up 6.1%. Short term interest rates rose while longer rates were generally flat. In March the Federal Reserve raised the federal funds rate another 1/4 of 1% to a range of 0.75 to 1%. Clients are asking us: Why has the stock market done so well?

JAN 2017

US stocks closed 2016 near record highs. Economic growth picked up in the latter part of the year and expectations are high for new pro-growth policies from Congress. Market volatility may rise as actual legislation is hammered out. Investors should stay the course.

OCT 2016

US stocks produced attractive but uneven returns in the first nine months of 2016. Longer term interest rates declined, while shorter term rates increased modestly. Many developed nations continue to have sovereign debt trading at negative yields. Low global rates have pushed some investors to “reach for yield.”

JUL 2016

Challenged by weak economic growth and political uncertainties, global equity markets generally produced modest gains or lost ground in the first half of 2016. Longer term interest rates continued to decline. Britain’s referendum in favor of leaving the European Union surprised the financial markets. Investors must remain disciplined during this period of economic uncertainty and difficult markets.

APR 2016

In the first quarter US stocks went on a wild ride, dropping 10% by mid-February then recovering to end the quarter just barely in positive territory. The stock market turmoil was one reason the Federal Reserve slowed its plan to raise short term interest rates. Most global economies are still growing slowly. US payrolls continue to expand at a healthy pace, and the consumer appears to be in good shape. The aging of the baby boomers is a secular trend that may reduce long term economic growth.

JAN 2016

US stocks in 2015 had a bumpy sideways ride but fared better than most other markets. The Federal Reserve raised interest rates for the first time since the 2008 recession but rates still remain at exceptionally low levels. Most global economies remain mired in slow growth trajectories. The US consumer appears to be on solid footings. We address a few client questions regarding oil prices, interest rates and more.

Special Topics

Six Decisions Before Seventy-Five

Research shows that major, complex decisions in later parts of life are particularly difficult. Often the approach is to simply delay until a crisis point. To avoid unnecessary stress on yourself or on loved ones, it makes more sense to prepare for major decisions before a crisis. We suggest there are six major questions that should be addressed before reaching age 75.

Prenuptial Agreements

In the course of our careers we have had numerous conversations with clients and their children about the advisability of a prenuptial (also known as premarital or ante nuptial) agreement. Often these conversations were after an engagement was announced and a wedding date set, and the client or child of the client was unaware of the concept of such an agreement and found the conversation uncomfortable.

Paying for College

The annual cost of attending many private colleges now approaches or exceeds $60,000. While this cost will be reduced for many families through needs-based scholarships and tuition discounts, families with accumulated financial assets will spend close to the full amount. Here are six basic approaches to saving and paying for college.

Avoiding Inheritance Mistakes

A substantial inheritance can have a life changing financial impact: if handled wisely, the elusive goals of financial security and a comfortable future retirement may become attainable. But sudden wealth can sometimes be overwhelming and, if not guarded carefully, can easily be eroded or destroyed. Avoiding the following common mistakes is key to your future financial wellbeing after receiving a substantial inheritance.