Monthly Outlook: June 2021  Everything is opening up. Do you feel it? Vaccines have been widely distributed, COVID is on the way out, masks are coming off, graduations just happened, today is June 1st, and summer vacations are starting. And I can just hear a national exhalation, “Whew, we’re ready!” Meanwhile, on Wall Street, investors have been in party mode for a year already, enjoying massive stimulus and expectations of economic recovery. While Main Street is coming alive, Wall Street seems to be stalling. Why? Well, all that stimulus has created significant inflation and maybe too-optimistic earnings expectations. What if the Federal Reserve (Fed) is forced to taper their stimulus programs? What if Congress doesn’t pass any more COVID-relief stimulus plans? What if the economy has to recover from here by itself, on its own strength? That could have a major impact on investment prices and that is the reason [...]

Monthly Outlook: May 2021  The Kentucky Derby is run on the first Saturday of May every year. It’s the most exciting two minutes in sports, some say. Picking the winner is difficult even for horse racing experts. The pre-race odds tell us who the favorite is, but it’s still a horse race. The favorite horse only wins 35% of the time. Investing is even harder, in some ways. Investing is like picking winners from a field of thousands of contestants that can go forward, backward, or sideways. But unlike horse racing, we can change our bets, change our investment selection and allocation, at any time during the race. And that, makes all the difference. To build lasting wealth, we must do more than just assemble a portfolio of fast running investments. We need to balance the goal of making it with the necessity of keeping it. What is wealth? It’s [...]

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 [...]