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October Newsletter

What happened: ·         October saw continued volatility in the equity markets. The month leading up to the US Presidential elections looked as if global indexes might recover from September and approach previous All time highs, but retreated ending the month mostly flat. This mid month retread in the equity market can most simply be explained by the uncertainty surrounding the election as well as COVID-19 cases continuing to raise. All this also lead US fund flows to move out of equities towards the safety of bonds.   ·         Even with Septembers sell off and October remaining mostly flat, Tech is still having a remarkable 2020, with the NASDAQ up over 22% YTD.  However, there is a different story to be told for the DOW Industrial Index and US small cap Companies, represented by the Russell 2000 index, both down nearly 6% at the end of October. This continues to show a stark picture between the economy at-large, compared to “big tech” and which sectors were hurt by the pandemic.  What we did: ·         Proxy managed equity-oriented clients, by holding steady in our allocation over the month with no changes to our Core Equity model.  We maintained  our model exospore to US equities utilizing IVV and QQQ, but have also kept some fixed income exposure via BND.  The algorithm predicted little change through out the month and was spot on.  ·         The Proxy Core Growth model held up well in the recently volatility, which offered the opportunity to add a few new positions.  The strategy, while still heavy in high growth tech, did largely benefit from a few select names in the healthcare and consumer cycle sectors. What we are watching: ·         The US elections seems to be the sole focus both domestically and globally.  With this very heated election coming to an end as the polls close November 6th,  we wait to see if Dem. Joe Biden can hold his lead in the polls or in President Trump we remain on for another 4 years.  With such a close race and President Trump already vocalizing concerns over voter fraud via mail in ballets, there is a chance this may drag on for months to come.  Such a situation could be have a significant drag on economic recovery and the release of addition COVID relief funds. ·         We continue to closely monitor advances in COVID-19 vaccinations, as the winter months approach and cases continue to raise. ·         We remain poised to react quickly if the market does in fact correct again, while remaining consistent with our algorithmic approach in our Core models. 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.

August Commentary

What happened: ·         With August now behind us, we looked back on solid returns across all major global indexes. The leader was yet again the NASDAQ with an impressive 11% return for the month. In-line with rising equities, we also saw the 10 Year Treasury Yield increase to 0.69% from 0.53%.  While still historically low, it represented ~35% increase over the prior month. ·         We ended the month with most major indexes now out of the red for the 2020, with the NASDAQ up 33% YTD. However, we still see US Small cap, represented by the Russell 2000 index, down over 5% so far this year. This provided a stark picture between the economy at-large, compared to “big tech” and which sectors were hurt by the pandemic.  What we did: ·         Proxy managed equity-oriented clients with a participation in the market rally, but without our foot fully on the gas pedal.  We maintained a defensive position in BND and GOVT in our equity models as we remained patient for opportunity, and looked to protect investor capital in this uncertain world. ·         As a result of our steadfast approach, there were no changes to the Core models. While we did hold a more conservative posture, we maintained some global allocations but held overweight in US equities. What we are watching: ·         As the S&P 500 and NASDAQ continue to make all time highs, and while we understand there are few alternatives to the equity markets, with debt rates at historic lows; it can still be argued that traditional valuations have gone too far, too fast. ·         We continue to closely monitor advances in COVID-19 vaccinations, the growing social unrest and looming US presidential election, which has a global impact no doubt. ·         We remain poised to react quickly if the market does in fact correct again, while remaining consistent with our algorithmic approach in our Core models. 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.

July Commentary

What happened: July was another strong month for the equity market, extending this historic recovery from March lows.  Technology continued to be the driving force, with the NASDAQ reaching new all-time highs, and the S&P 500 breaking out of the red for 2020.  The Dow Jones Industrial Average recovered, but remained down over 8% YTD, given it is mostly tech-free.   With the broad market soaring, one would think COVID-19 is a thing of the past. However, COVID is still affecting us daily on many levels and will likely be doing so for the foreseeable future. Additionally, the significant stimulus of an extra $600 weekly added as part of unemployment benefits ended this month. This growing disconnect between the stock market and the real economy led many to believe a market reversal was not a matter of if, but when.  What we did: We held steady with most of our equity positions, overweighted in U.S. with continued exposure to Asian markets, which contributed to July’s performance.   The holdings in the Core Equity model with the most substantial changes were in the conservative sleeve, as we cycled out of TOTL into BND and GOVT. With the sale of VGK we removed the last of our direct exposure to Europe.  What we are watching: The S&P 500 has broken through the 3,200 handle-mark which had previously shown resistance on the technical side, and may now continue to bleed up heading toward the US presidential election. We are continuing to closely monitor the reopening of businesses and increase in COVID-19 cases which now seem to have little effect on this unprecedented recovery.  We remain poised to react quickly if the market does in fact correct again, while remaining consistent with the science in our Core Equity model.

2020 First Quarter Recap

What a difference a month makes. We began the quarter with a somewhat rosy global economy, with only distant issues happening on the other side of the world. China was having troubles since December with what was thought to be a pneumonia outbreak. Combined with the wild fires that overtook Australia. When a surreal wave of chaos and worry swept the globe, creating a historic event: a global health pandemic that quickly burst into a global lockdown, practically halting the world economy. How did Proxy react in this scenario? In the case of our global diversification model, Core Equity, whose stats are above, we stayed our course and let our indicators tell us when to divest. We closely watched the indicators during the initial drop (-13%) from the all-times highs made in February and the rebound the market made (+5%) up to March 4th. We exited all our core funds on March 11th with the overall market down 19%, and moved to safety in a fixed income exposure, in the form of the professionally managed TOTL fund. The market proceeded to drop a total of -34%. This was such a tricky market that even safe havens were getting caught in the chaotic volatility. However, we sheltered the brunt of the storm. Once the Fed announced a number of liquidity injection measures, we added exposure to government Treasuries. And now what? Foremost, we are not in this for the short run. We are again applying our long standing methodologies to add risk when it makes sense to do so. As we’ve commented in our last newsletters, these are not conditions to invest “normally”, we will proceed with a lot of caution since we have two major intertwined events going on at the same time, the imminent recession and a public health threat. We are closely monitoring the quarterly earnings results coming out early April to understand how deep will the economic impact be, while we apply our tactical and timing rules to our investment choices.

Monthly Commentary: April 2020

What happened: What we did: What is to come: 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.

Monthly Commentary: May 2020

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.

2020 Second Quarter Recap

How did Proxy react in this scenario: What we are monitoring for the near future: 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.