Market Update

As expected, the first few days of the year started with everyone selling off the stocks that did so well last year — large-cap tech. We did the exact same thing in our own investment accounts. The reason is simple — any gains from the start of January don’t have to have taxes paid on them until April 2025, and some of these stocks went up 50% or more in 2023. 

• January 11, 2024

Lately, I’ve been thinking about why it is so ingrained in our human nature to worry. We’re a nervous species, fearing uncertainty, volatility, and anything that we can’t control. I’m in a business that exists primarily to take financial worry off the shoulders of our clients and manage it ourselves, but we live in a media environment that seeks to capitalize on fear without looking at the greater picture.

• November 16, 2023

Last week was a big one in the market. We had a new bull market declared, and we saw the Federal Reserve finally pause its year-plus campaign of hiking interest rates. Let’s deal with the Fed first:

No rate hike, but are more coming?

While it did not raise rates, the Fed did raise its terminal interest rate, which is its target for where it sees interest rates going, by 50 base points, or a half percent.

• June 21, 2023

I’m hearing from a lot of you who are concerned about the debt ceiling battle in Washington and what it might mean for you if the two sides can’t come together on a deal before the U.S. defaults on its bills. 

In my view, the whole rodeo is being blown out of proportion by the media as it floods us with what-if scenarios. There is a history of presidents having to work with a hostile opposition party in Congress when up against the debt ceiling. The only solution is for both parties to agree to raise the debt ceiling and then focus on a truly balanced budget.

• May 18, 2023

Sometimes the best-laid plans don’t work out as you expected. My mother always said, when things don’t go your way, consider the “why.” 

I believe that the Federal Reserve would do well to consider that message. We’ve just gone through a banking crisis caused in part by the Fed aggressively raising interest rates, which resulted in the closure of one of the largest banks in the U.S. and the sharpest decline in commercial lending on record. In the meantime, wage inflation and housing costs remain stubbornly high, while unemployment is historically low.

• April 14, 2023

“Buckle up, folks — we’re about to experience some heavy turbulence.”

Why do I bring this up now? Because folks, we’ve experienced some heavy market turbulence lately, and while the skies are a little calmer right now, my guess is that we have more to come before this plane lands. But I’m an experienced flyer, and let me assure you, this is no time to get panicky with your portfolios.

• February 23, 2023

2022 was truly an awful year as the Federal Reserve began its interest rate hike policy in an attempt to battle inflation. Speaking of inflation, I know that many of you have been frustrated by the higher costs associated with financing a new home, purchasing a vehicle, or trips to any retailer. Inflation, measured by the Consumer Price Index, rose by 6.5% in 2022.

New year, same problems.

However, there are several pieces of good news.

• January 19, 2023

I recently introduced the classic board game Axis and Allies to my sons. Michael, my third-grader, asked to be Russia, and I was happy to let him. When it comes to his turn, as head of Russia, the first thing he did was invade Ukraine. I shouldn’t have been surprised – this is the same kid I used to hear randomly announcing (while floating in a sea of bubbles in the bathtub) that Amy McGrath was “too liberal for Kentucky!” Remember those ads? Can’t say he’s not paying attention! The daily flow of nonstop media really does affect us all. 

• December 1, 2022

I know many of you opened your statements on June 30 at the end of the second quarter and probably wished you hadn’t. You may or may not have burned them. That said, July was a good month as equities and bonds recovered from their lows. During this same period of time, we also had a hot inflation number we hadn’t seen since the early ‘80s of 9.1 percent. We also saw the Fed raise rates another .75 percent. 

• August 4, 2022

How low can it go? That’s the question. I’ve heard from many of you with questions along the lines of when will the market recover, when will the bleeding stop. I’ve also heard others who have called to let me know their 401(k) is a 301(k), that they never should have invested in stocks, this terrible market is due to the current (pick a bad guy):  president / fed chairman / supply chain / Russia / inflation – and that this will never improve. It’s only down from here. 

• June 24, 2022