Monthly Outlook: April 2021  It’s finally springtime in the Rockies and that means excitement for warmer and longer days, new growth, and transition from skis to bikes. Likewise, markets are volatile with transition from growth to value and rising interest rates to accompany the recovering economy. It’s only natural, then, that investors are coming out of their pandemic lock-down mode and wondering what the “new normal” will mean for them. Luckily, we have decades of history of economic and market cycles to learn from and have a pretty good idea what investors should do and not do. Below, we discuss three common mistakes that investors make at turning points. Chasing Performance For the past two years, Big Tech stocks like Facebook, Apple, and Google have led markets higher and vastly outperformed other sectors. Some astute, or maybe lucky, investors piled into technology stocks and had big returns in 2019 and [...]

Monthly Outlook: March 2021  Stocks did well in the beginning of February but faded into the end of the month over concerns that interest rates and inflation are spiking higher. For the month, US stocks gained 2.7% and are up just 1.7%, YTD. International stocks gained 2.0% in February and are up 2.4%, YTD. But the market that has been so strong, the tech-heavy NASDAQ, lost 0.1% in February and is flat, YTD. There’s a clear rotation in the stock market from Large Growth (Tech) to Large Value (Financials & Energy). As we see so often, last year’s winners are unlikely to be this year’s winners. Bonds were the weak market in February, losing 1.6% as interest rates (10-year US Treasury) spiked to 1.5%. Remember, the 10-year US Treasury rate was only 0.5% last August. Investors seem to be increasingly concerned that the trillions of stimulus dollars coming from both [...]

Monthly Outlook: February 2021  One year ago, the world was just becoming aware of the coronavirus, and we had no idea what the next year would entail. COVID came as a total surprise and a catalyst for a 30% stock market decline in March 2020. No one would have predicted that one year later, many parts of the economy would still be in restricted or “lock-down” mode, 10 million people would still be unemployed, that we’d be just beginning to roll out a vaccine, or that 450,000+ people in the U.S. had died. Further, no one would have predicted that given this economic and human disaster, the stock market would be up 11%. It doesn’t really make sense and that’s the point. As we look ahead to 2021, we really can’t know what we don’t know. And even if you did know, you couldn’t be sure what the markets would [...]

Monthly Outlook: January 2021  Like everyone else, we’re ready to say goodbye to 2020, although it was a decent year for investors. Our managed portfolios made nice returns. But overall, I think I’ve aged more than one year this year from all the stress of COVID, politics, and economic restrictions. We’re all ready to return to normal, but it won’t happen on January 1st. Surely, we’ll muddle our way back towards normal, but we’ll have hiccups and challenges along the way. As we look ahead to 2021, it’s tempting to join the hordes of pundits who make their Year Ahead Predictions for the markets. It seems that every money manager has a Top 10 list of predictions that skew optimistic and sure-fire. We love to read them because we want to believe! Plus, optimism and confidence sell subscriptions and products. Unfortunately, history proves that most of these predictions will be [...]

Monthly Outlook: December 2020 Stock market indexes are making new highs and many stocks are higher today than they were pre-COVID. Why? Because, you know, everything is awesome! Except that they’re not. Stock markets could hardly be more disconnected from reality and seem to be pricing in a very optimistic and return-to-normal future. We’ve had 270,000 COVID deaths in the U.S. this year and the virus is still unchecked as of today. Twenty million people lost their jobs initially this spring and although 10 million people are back to work, that leaves 10 million people still unemployed, which is still a recession-level 7% unemployment rate. Here in Colorado, like most states, we’re in “Code Red” with restaurants open at 25% capacity and other businesses, especially leisure and hospitality, are struggling to stay afloat. According to Standard & Poor’s, the S&P500 earnings in 2019 (pre-COVID) were $139/share or 23x price to [...]

Monthly Outlook: November 2020  At long last, we’re finally in election week. This year has been a stressful one for almost everyone, full of anxiety, uncertainty, waiting, and fighting. It’s just one thing versus another: Trump vs. Biden, Red vs. Blue, Rich vs. Poor, Covid Fighters vs. Covid Deniers, Urban vs. Rural, White vs. Non-white, Restaurants vs. Groceries, Amazon vs. Local Retailers, Airplanes vs. Road Trips. Everything just seems like a winner-take-all contest and it’s exhausting. The problem with “vs.” compared to “and” is that it results in winners and losers, with big consequences for society and for markets. We’ll focus on the impacts on markets since that’s our role. The S&P500 this year has only gained 1.2%, which is far below average. But it hasn’t been a boring year. The S&P, sitting at 3,270, has moved about an equal 3,400 points up and down this year. The market’s gone [...]