Monthly Outlook: March 2025 Markets popped 3.5% higher for three days after the November elections. Since then, markets have been as volatile as the daily tweets and policy changes coming out of Washington. It’s creating a lot of anxiety for all of us: citizens, investors, and global politicians, alike. Since the 3-day post-election pop, U.S. markets have been stuck with uncertainty, with the S&P500 -0.3%, and the NASDAQ -0.9%. It surprises people to know that, for the same period, the international stock index, EAFE, is +4.5% and Bonds are +1.7%. So much for tariffs helping the U.S. and hurting our global partners. 2025 has only just begun and, as Pink Floyd might sing today, investors have become “uncomfortably numb.” In the long run, markets trade on fundamentals and valuation. Calculate a business’s earnings today, estimate its future growth rate, assign a reasonable valuation multiple, and you’ve got your future price [...]

Monthly Outlook: February 2025 Our 2025 Outlook made only one prediction: “Unpredictability.” And so far, we’re not wrong! Since the election, the stock market (S&P500) has zig-zagged about 4%, five separate times. Up, down, up, and so on.  But would it surprise you that the S&P500 is actually flat since the day after the November elections? In other words, it’s been a volatile, but mostly flattish, market for the past three months. Investors seem to be hanging on every newsflash, every tweet, and not really sure what’s real and what’s not. If history is any guide (and of course it is), flattish markets don’t last very long, and a clear direction will develop soon enough. But we’ve also learned from history that it’s best not to guess about market trends, and better to let the market show us. We’ll continue our vigilance and invest in uptrends for growth when we [...]

Monthly Outlook: January 2025 This is the time of year when we all reflect on the past, ponder the future, and make promises and plans, some of which we’ll keep. Wall Street, similarly, can’t help themselves in making predictions and forecasts, most of which will be wrong, based on history. We all know this, factually, but investors still hang on every word, especially if it agrees with our own view. If TV news would put the forecaster’s actual track record below their on-screen image, we’d surely turn off the TV. But forecasters are rarely held accountable, so the fascination continues. 2025 will be unpredictable for many reasons, especially with Trump in the White House. That’s not a political statement, it’s just an observation of his operating style. Will he deport millions of people on Day One? Will he slash $trillions from the budget? Will he buy Greenland? Many other countries [...]

Monthly Outlook: December 2024 The U.S. election outcomes surprised many and have already had a meaningful impact on markets around the world. The expected upcoming shifts in U.S. policies are creating new winners and losers and the markets are adjusting quickly. For example, November was a very good month for U.S. stocks, with the S&P500 up +5.9%. International stocks however, especially emerging markets like China and Mexico, are much weaker due to expectations of tariffs and other deglobalization policies. And bonds were both up and down in November, as interest rates first rose on inflation concerns, before falling back on slowing economy concerns. One thing is for sure, and without being political, the new regime and their proposed policies are striking, disruptive, and sizeable. As investors, we should expect more volatility, more uncertainty, and more need to be flexible and open-minded. We probably don’t even know what we don’t know [...]

Monthly Outlook: November Post Election 2024 What a difference an election can make! The outcome of the U.S. elections on November 5th surprised many, including most polls and pundits. Republicans did better than the polls suggested pre-election day and they now control the White House, House and Senate. Such a rout has important cultural and civic implications, but it’s not our place to dissect those. Instead, we’ll stay in our lane and share with you how this political shift is impacting markets already as policies and appointments are being announced. Because many of the announcements are objectively shocking, the impacts on markets are significant and we can already see clear winners and losers in markets. Inflation, Interest Rates, and Bonds It’s often said that the bond market is the “smart money,” and the stock market is the “emotional money.” If so, the smart money is now concerned about resurging inflation [...]

Monthly Outlook: November 2024 Markets have rallied for the better part of two years now and the S&P 500 hit another new high earlier this month. The NASDAQ and international stocks, too, are near all-time highs. This leaves the market at peak valuations levels, with a 28x P/E ratio and a TMC/GDP of 1.9x. Bubbles aren’t that surprising, that’s not the point. The big question is why markets are so exuberant, just five days away from critical elections that are so polarizing, so uncertain with 50/50 polls, and so different in their expected outcomes? Normally, so much uncertainty would lead markets to recede and consolidate as they await the election outcome. When we look back at elections in 2012, 2016, and 2020, we see more consolidation than we see this year. And yet, this election seems closer and more contentious than those. It doesn’t make sense. The investment news channels [...]