Blog2019-09-13T10:23:28-06:00

Gold > Bonds > Stocks > Cash

Monthly Outlook: October 2019  September was a bit of a stall for global stocks, but at least the long-term trends remain up for most markets. U.S. stocks (S&P500) were up 1.7%, international stocks were up 2.8%, and bonds dipped 0.6%.  The 25% bond / 75% stock benchmark was up 1.3%. Not bad. Looking at slightly longer trends and market performance, however, we can see that global stock markets are at stall speed.  For the past twelve months, U.S stocks are only up 2.9%, international stocks are down 1.1%. Bonds, however, are up a healthy 10.3%. The 25% bond / 75% stock benchmark is only up 2.7% for the past twelve months (and it’s all from bonds!). That’s way below the 6.2% 10-year average benchmark return. What does it tell us when gold is the best performing asset class? In fact, gold is outperforming bonds, and bonds are outperforming global stocks. [...]

By |October 1st, 2019|News, Outlook|

Following the Trends, Not the Tweets

Monthly Outlook: September 2019  August was a dizzying month for stocks with plenty of 1%+ daily moves in both directions. One tweet would drive algorithms to pump the market up 1%+ only to be followed by another tweet that would drive the market down 1%+. In total, the S&P500 oscillated over 700 points in August, or a total of 24%. But, at month end, the cumulative effect was just down -1.8%. International stock markets followed a similar pattern, down -2.4% for the month. Bonds were, again, the best performing asset class, gaining +2.7% in August as interest rates continue to fall. The 10-year US Treasury, for example, fell from 2.02% to 1.51% in August and we see further cuts in the months ahead. Tweets are surely not the best way to manage trade policies and other political matters but that’s where we are. The stock market is just trying to [...]

By |September 5th, 2019|News, Outlook|

Summer Flip Flops

Monthly Outlook: August 2019  July ended with the first cut in interest rates since late 2007. The Federal Reserve cut the Fed Funds rate ¼% from 2.4% to 2.15% on concerns about global economic slowing, or in their words, “In light of the implications of global developments for the economic outlook…” We’ll discuss what this rate cut means a bit later. Markets were mostly flat in July, and definitely in summer mode with lighter volume and low volatility. The U.S. stock market gained +1.4%, the international stock market lost -1.8%, and bonds were flat, up +0.1%. The 10-year U.S. Treasury rate is now 2.02%, down from a recent peak of 3.2% in November, 2018. But the bigger and over-arching story is how stocks continue to flip-flop for the past year (and we’re not talking summer footwear). Let’s review the flip-flop trends of the S&P500: July 2018 to September 2018, +6% [...]

By |August 2nd, 2019|News, Outlook|

Does 2019 Rhyme with 2000 & 2007?

Monthly Outlook: July 2019  They say history doesn’t repeat itself, but sometimes it rhymes. While 2019 has its own set of specifics, it’s looking a lot like 2000 and 2007 in many ways. We’ll get into that in detail, below, but suffice it to say that’s not a rhyme we really want to hear. 2000 and 2007 were major tops that each endured a year of volatility (similar to now) and then ended badly with a recession and significant bear market. Then, as now, no one wanted to see it, even though fundamental data was flashing warning lights. Let’s review the numbers before we dig into comparisons to previous tops. Global stocks had a good month in June, gaining back what they lost in May. Remember that the S&P500 lost 20% from October to December, then gained it all back by May. Then it sunk again in May by 6% [...]

By |July 2nd, 2019|News, Outlook|

Rule #3 – Never Lose Big

Monthly Outlook: June 2019    A lot of experience and research supports our thesis that you can invest better than average if you’ll follow our three simple rules: Rule #1, costs matter so keep them low so more of the return flows through to you. Rule #2, stock picking to out-perform the market is really hard so focus, instead, on actively managing your allocation. And Rule #3, the most important of all, is Never Lose Big! Our iFolios strategy was carefully designed with these 3 Rules in mind. And today, with many markets tipping over to new downtrends, is the perfect time to review how we manage portfolios to try and never lose big. Before we do, let’s review the markets.    May proved to be a tough month for investors. The S&P500 lost 6.5% in May, giving back the 6.5% gain it had achieved from February through April.  [...]

By |June 3rd, 2019|News, Outlook|

Everything is Awesome?

Monthly Outlook: May 2019   You hear it everywhere – “Everything is Awesome!” GDP is up over 3%, earnings are up, employment is up. Stocks, bonds, gold, dollar, home prices – all up! Awesome! It’s a chicken in every pot! What could go wrong?  We’ll get to that. But first, let’s review April. U.S. stocks continued their 2019 rally with the Russell 3000 gaining another 3.9%. The strongest sectors are Technology and Utilities, an odd combination. Weakness is seen in Energy, Financials, and Healthcare. International stocks gained 2.7% with Europe and Emerging Markets doing better than Asia. Bonds marked time in April with flat results, down 0.1% for the month. Blending the markets for common allocations, the iFolios 75 benchmark was up 2.3% and the iFolios 85 benchmark was up 2.7%. We matched or slightly beat the benchmarks in May. So yeah, everything does seem awesome! We should also point out here [...]

By |May 3rd, 2019|News, Outlook|