What Happened: What we Did: What we are Watching: Disclaimer: Investing in financial markets carries risk, including loss of principal. You can lose some or all of the money that is invested. Past performance is no guarantee of future results. The material contained herein is for informational purposes only. This document does not constitute a recommendation of securities, securities portfolio, transactions or investment strategies. The projections were created based on hypothetical information, there is no guarantee that any of them will come true. Proxy Financial is a registered investment adviser. Proxy and its Financial Advisors are not licensed in all states to offer securities and insurance products. This site is not a solicitation of interest in any of these products or service in any state which the registered representative is not properly licenses.
What Happened: · For September, the US equity markets had its first negative month of performance since January. Domestic Year-to Date performance has remained strong through the end of the 3rd quarter with major domestic indexes still holding their gains while achieving positive returns of at least + 10%. The S&P 500 has returned + 14% through the end of September. The NASDAQ index, returned a negative -5.3% in September and now stands at + 12% Year-to-Date. The Russell 2000 Index, which measures the performance of smaller sized companies returned -3% in the month of September and has returned +11.6% for the year. · International Equity Markets also were negative in September. The developed countries as measured by the MSCI EAFE Index were down just over 3% in the month, while still finishing out September + 6% on its performance for the year. The MSCI Emerging Markets Index was down – 4% in September, bringing its year-to-date performance to now just under – 3% for 2021. The Brazilian equity markets as measured by the BOVESPA stock Index was pretty much flat coming into the month of September, it also participated in the equity market selloff loosing -6.5% in the month and now sits at -6.75% for 2021 through the end of September. · US Fixed Income was also down in September, as measured by the Bloomberg US Aggregate Total Return Index. September’s performance was – 0.87%, bringing its total return for the year to -1.55% through the end of the third quarter. The yield on the 10 Year US Treasury rose to the 1.5% levels up from 1.3% where it began the month. We know as yields go up bond prices are going down, so we expect fixed income performance to be challenged in this low interest rate environment. In the commodities arena, Oil was one part of the market that experienced a positive month in September appreciating over 9% to now $75 a barrel. For the year Oil has appreciated +54% in 2021. In the precious metals space Gold was down just over 2% in September and now down -6% on the year pricing at $1,775 / oz. Silver was down over 8% in the month of September and now at $22 / oz. sits -16% below where it began the year. What we Did: · Coming off a strong 2020, the growth asset class continued to experienced a rotation to the value class. While this is not unexpected, the wealth management team has stayed true to our discipline, seeking new growth opportunities as valuation return come back down. At the same time, we are looking to make sure there is still significant runway ahead for our portfolio companies to achieve significant capital appreciation. The concern so much momentum is that some of the names in the portfolio may have reached a fair or full valuation. We continue to evaluate not just how our portfolio companies are relatively positioned within their industry versus their competitors, but also that they can continue to achieve outperformance versus other opportunities found within the equity growth mandate. Focused on long term growth, we have found short term volatility can often create great opportunities if you know what you’re looking for. · Core Global Equity portfolio, we continue to stay the course with our global equity allocation. The portfolio has performed positively as we continue to participate in the current bull market cycle. Our continued concern for Chinese equities has helped protect on the downside. Our concern for a mid-cycle pullback has increased which is leading us to proceed with caution as we slightly increased our exposure to assets such as Gold, US Treasuries & Gold, to hedge against a possible market downturn · In our Dividend Income Portfolio strategy, which has been the more conservative of the equity portfolios, we continued to prepare for a market pullback. The portfolio which has an income, cash flow centric focus is positioned well above our targeted yield of 2x the S&P 500. The portfolio is currently yielding approximately 3.5%, while the S&P 500 yields around 1.3%, considering the interest rate environment we feel that this level of income generation is working for our clients. The inclusion of a High Yield fixed income ETF increases the diversification of the asset allocation while also maintaining our income cash flow centric portfolio mandate. What we are Watching: · There were some major global news stories in recent months that have the potential to disrupt the global economy. The United States withdrawal of Afghanistan brings an end to 20 years of war. This could begin to signal a less influential U.S. around the globe. Look for other powerful nations like China and Russia to start to assert their influence abroad in strategic locations. Areas to focus on for example; Taiwan, the Korean Peninsula, South China Sea. Also, countries like Iran or the Ukraine could serve as a hotbed of geo-political tensions, which could certainly change the landscape of the global economy. China’s recent banning of bitcoin and the default of Evergrande, China’s second largest property developer, has raised concerns over the long-term investment outlook for the world’s second largest economy as well. · Company earnings and outlooks sentiment will be a focus as we turn the corner to head into the end of the year. September rattled the bullish investors and now some investors point to a lack of a new catalyst to bring the market higher. Severe weather and supply chain issues will be mentioned often in companies’ earnings call as negative factors that effected the bottom line. Inflation data will be in focus to see if these economic pressures are here to stay or more transitory. Non-Farm Payrolls are still way below pre pandemic levels raising concerns about the labor market. With Federal unemployment benefits rolling off the labor market could gain back some willing workers. The unemployment rate currently sits at 5.2%. · Policy from Washington DC, always another area of focus. We’ll be watching to
Disclaimer: Investing in financial markets carries risk, including loss of principal. You can lose some or all of the money that is invested. Past performance is no guarantee of future results. The material contained herein is for informational purposes only. This document does not constitute a recommendation of securities, securities portfolio, transactions or investment strategies. The projections were created based on hypothetical information, there is no guarantee that any of them will come true. Proxy Financial is a registered investment adviser. Proxy and its Financial Advisors are not licensed in all states to offer securities and insurance products. This site is not a solicitation of interest in any of these products or service in any state which the registered representative is not properly licenses. What happened: · The United States equity markets had another positive month in June. Technology was back in favor alongside energy which has been the best performing sector in 2021. The real estate and healthcare equity sectors also performed well in June. · The S&P 500 was up + 2.2% in June and has returned + 14.4% through the first half of the year, closing out the second quarter at record high levels. The NASDAQ Composite Index was up + 5.5% in June, bringing its year-to-date performance to + 12.5% (as of 06/30). The domestic small cap sector, measured by the Russell 2000 Index, also had positive returns during the month of June returning + 1.8% and + 17% over the first half of 2021. International equity markets continue to lag behind the United States. · The MSCI EAFE (Europe, Asia, Far East) was slightly negative in the month of June but still had a positive return over the second quarter + 5.1% and was + 8.8% year-to-date (June 30). Emerging markets were also positive for the quarter but trailed compared to the more developed markets. The MSCI Emerging Markets Index returned + 5% in the second quarter and + 7.5% over the first half of the year. · The fixed income markets also gained slightly in the month of June, with interest rates falling, the Bloomberg Barclays Aggregate Index returned + 0.7% in the month of June and returned negative – 1.6% over the first half of the year. As default rates continued to drop, investors were willing to pay up for extra incremental yield buying lower credit quality bonds, as well as bonds with longer-dated maturities, so higher-yielding credit and more interest rate sensitive types of bonds have recently performed well. What we did: · We mostly stayed the course on our U.S. equities. We actively reduce our direct exposure to China. We took some gains, while in other positions we also realized some losses. We increased our cash position across our core equity and our growth portfolios (both hold over 4% cash now). · In our equity dividend strategy, we added a few new names increasing our targeted average yield to over 3.5%. Actively adjusting our portfolios during this period, we strive to provide our clients with the ability to lose less on the downside and gain more from the upside by buying fundamentally good companies that become cheaper during these down-market periods. · When it comes to fixed income & bonds, there is not much that we strongly view as attractive right now. We do not see the U.S. Federal Reserve increasing interest rates during uncertain times. U.S. Treasuries at these lower yields we still view as unattractive longer-term investments, being selective within the fixed income space will be key. Corporate bonds and higher-yielding bonds are likely to be in focus should yield pick back up and prices fall. What we are watching: · We are seeing domestic equity markets continue to lead upward, setting new record highs to go along with the accommodative monetary policy coming out of Washington D.C. International markets remain a laggard with COVID & the Delta variant concerns really starting to jeopardize the strength of the global recovery. · The Chinese Communist Party turned 100 recently and they clearly seem to be getting ready to challenge the United States as the other world’s economic superpower. China is taking a strong stance toward regulating their technology companies, with more oversight, the companies will have to move away from western investment capital. The goal is to bring home the investment returns and technologies back into China. · COVID and its variants are a major global concern dragging down what might be a speedier recovery. Large unvaccinated populations have seen a spike in cases recently as the summer months have gone on. How the governments around the globe decide to respond will be important, will the global recovery be stunted? · We think volatility is going to increase, since markets were up around 14%, measured by the S&P 500, over the first half of the year, we feel strongly about the possibility that equity markets will experience somewhat of a healthy pullback and then hopefully rally toward the end of the year. Corporate earnings from the second quarter will give us an insight into how the stimulus money is working its way through the economy. · Other questions to ask, what will come out of the eventual infrastructure bill, what are the changes to the corporate tax rate, are the recent economic inflation metrics here to stay or just transitory? Any changes to both our fiscal and monetary policies would certainly disrupt the markets. · We are keeping a keen eye on the political environment around the globe for any disruption in global trade or geopolitical tensions that could interrupt or upset the global recovery. · We expect sovereign governments to continue to challenge and regulate big tech companies, like Amazon, Facebook, and Google. The “crypto” industry will not be spared, eventually, global central banks will look to issue their own digital currencies. Ransomware attacks should concern both governments and companies alike, creating more of a need for a digitally secured world. · Plenty of variables to consider for the second half of 2021, we
What we did: What we are watching: We continue to keep an eye on the COVID-19 vaccination numbers globally, and how new COVID mutations and new waves might hinder recent efforts. Disclaimer: Investing in financial markets carries risk, including loss of principal. You can lose some or all of the money that is invested. Past performance is no guarantee of future results. The material contained herein is for informational purposes only. This document does not constitute a recommendation of securities, securities portfolio, transactions or investment strategies. The projections were created based on hypothetical information, there is no guarantee that any of them will come true. Proxy Financial is a registered investment adviser. Proxy and its Financial Advisors are not licensed in all states to offer securities and insurance products. This site is not a solicitation of interest in any of these products or service in any state which the registered representative is not properly licenses.
What happened: What we did: What we are watching: Disclaimer: Investing in financial markets carries risk, including loss of principal. You can lose some or all of the money that is invested. Past performance is no guarantee of future results. The material contained herein is for informational purposes only. This document does not constitute a recommendation of securities, securities portfolio, transactions or investment strategies. The projections were created based on hypothetical information, there is no guarantee that any of them will come true. Proxy Financial is a registered investment adviser. Proxy and its Financial Advisors are not licensed in all states to offer securities and insurance products. This site is not a solicitation of interest in any of these products or services in any state in which the registered representative is not properly licensed.
What happened: · U.S. equities continued their upward movement from the pandemic lows seen in March of 2020. The first quarter ended strongly with March adding significant returns to an otherwise choppy year. With the S&P at +5.46%, DJIA +7.76 and NASDAQ only +2.78%, it was clear that a shift towards value has taken place. Small Caps outperformed all with the Russell 2000 up over 12.4% for the quarter. · International markets yet again have lagged the U.S., both in developed (+2.83%) and Emerging markets (1.95%). Global monetary supply continued to be increased by central banks, and the recent $1.9 Trillion stimulus from the Biden administration and a similar dollar amount in an infrastructure bill shows no sign of curtailing this massive amount of government spending and borrowing to fuel the economy. · While the massive spending in the US had surely been tailwind to the US equity markets, the fixed Income markets were challenged with a significant rise in inflation expectations. We saw a rise in the 10 Year US Treasury Yield of 81bps to 1.74%. The Barclay’s Aggregate Bond Index returned a negative (3.37%) in the first quarter of 2021. What we did: · As we saw a rotation from Growth to Value (a flight towards quality), volatility pursued resulting both loses in some of our holdings as well as significant prices drops in other stocks that we had been watching. We chose to make the best out of the situation and actively realize loses for tax sensitive clients. We also took saw an opportunity to add some growth stocks that were previously viewed by us as overpriced (i.e., PTON) · We also made some tactile shifts such as adding direct exposure to Semiconductors via SMH. With a shortage in supply and growing demand (renewable energy) we saw this as both a short-term and longer-term opportunity. · While we believed the gap between value and growth had closed significantly, and value became more difficult to identify, we added some additional yield in our Equity Income strategy via high yield debt. We saw the space as attractive with equity valuations being where they are, the Fed fund rate remaining at zero and tons of monetary supply, making default in the high yield less likely. What we are watching: · We are looking to see a decrease in jobless claims, continued vaccination of adult populations (end of summer herd immunity), along with stimulus money pushing overall economic growth. · We are not overly concerned yet are anticipating some inflation and new money begins to circulate. However, hikes in federal tax rates and potential changes to the tax code on cap gains/ investment income could be a larger concern. · Proxy believes we will continue to see market volatility and we will be looking for the opportunities it will create to enter long-term investments at a fairer valuation. · We continue to keep an eye on the COVID-19 vaccination numbers globally, and how new COVID mutations and new waves might hinder recent efforts. Disclaimer: Investing in financial markets carries risk, including loss of principal. You can lose some or all of the money that is invested. Past performance is no guarantee of future results. The material contained herein is for informational purposes only. This document does not constitute a recommendation of securities, securities portfolio, transactions or investment strategies. The projections were created based on hypothetical information, there is no guarantee that any of them will come true. Proxy Financial is a registered investment adviser. Proxy and its Financial Advisors are not licensed in all states to offer securities and insurance products. This site is not a solicitation of interest in any of these products or service in any state which the registered representative is not properly licenses.
What happened: What we did: What we are watching: We continue to keep an eye on the COVID-19 vaccination numbers globally, and how new COVID mutations and new waves might hinder recent efforts. Disclaimer: Investing in financial markets carries risk, including loss of principal. You can lose some or all of the money that is invested. Past performance is no guarantee of future results. The material contained herein is for informational purposes only. This document does not constitute a recommendation of securities, securities portfolio, transactions or investment strategies. The projections were created based on hypothetical information, there is no guarantee that any of them will come true. Proxy Financial is a registered investment adviser. Proxy and its Financial Advisors are not licensed in all states to offer securities and insurance products. This site is not a solicitation of interest in any of these products or service in any state which the registered representative is not properly licenses.
What happened: What we did: What we are watching: Our article may include predictions, estimates or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this publication. Proxy Financial is a registered investment adviser. Proxy and its Financial Advisors are not licensed in all states to offer securities and insurance products. This site is not a solicitation of interest in any of these products or service in any state which the registered representative is not properly licensed.
What happened: What we did: What we are watching: Our article may include predictions, estimates or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this publication. Proxy Financial is a registered investment adviser. Proxy and its Financial Advisors are not licensed in all states to offer securities and insurance products. This site is not a solicitation of interest in any of these products or service in any state which the registered representative is not properly licensed.