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Market Update

<b><i>Guide to investing in an election year</i><span>&#160;</span></b>

Guide to investing in an election year 

Presidential elections can be anxiety inducing. But when it comes to investing, do elections really matter all that much? This guide examines 90 years of investment data across 23 election cycles to answer your concerns about investing in an election year. Discover:

  • If Republicans or Democrats are better for investors
  • Which sectors have done best in election years
  • Common investing mistakes to avoid
Learn more

December 2023 Outlook  

STOCKS (Owning Style of Investing): As deep recession fears decrease, U.S. Small Company stocks, emerging market stocks, and commodities look more attractive. Small caps are currently experiencing their most significant discount relative to large caps in more than two decades. Despite the likelihood of greater earnings decline for small caps during a recession, I believe this is already factored into their valuation. Historically, small caps have delivered the most robust equity returns over the long term as compared to large cap stocks.

BONDS (Loaning Style of Investing): Consider pairing safety (CDs and government bonds and cash) with high-yield bonds and floating-rate loans for more diversification. The current credit fundamentals and higher yields remain supportive, with default rates not looking to increase significantly this year.

Levels of Attraction: This aids in allocating and making additions or withdrawals. This is not a recommendation to sell ultimately out of less attractive investments to purchase more attractive ones. Your allocation should be more than what looks attractive; It must also consider your risk tolerance, goals, current holdings, tax circumstances, and more. 

This material is being furnished for general educational purposes only. The material does not constitute advice or recommendations of any nature, including fiduciary investment advice. Investors should seek professional legal, financial, and tax advice before making any investment decisions.

Watch - November 2023 Market Update

Watch - November 2023 Market Update

Watch my quick summary video update on the market and what areas are attractive.

Watch

Our market update comes from reviewing many of these valuable resources listed below. As a result, these third parties do not represent our firm's beliefs or any of the companies we represent. These resources are for educational purposes only and are not recommendations.

PAST MARKET UPDATES

August - September 2023 Outlook  

STOCKS (Owning Style of Investing): The U.S. stock market outlook remains uncertain despite its resilient labor market. On a relatively general basis, international stock valuations look more attractive than the U.S. Plus, if the U.S. dollar weakens relative to international currencies, the exchange rate conversion could cause international stock values to increase. Following recent sell-off in large cap has made valuations more reasonable.

BONDS (Loaning Style of Investing): If FDIC Insured CDs and U.S. Treasury bond rates have peaked, this may be an excellent time to lock in these historically high rates (compared to the past decade's average rate). For balancing risk and reward, instead of purchasing corporate investment grade bonds only, consider pairing safety (CDs and government bonds) with high-yield bonds and floating-rate loans for more diversification. The current credit fundamentals and higher yields remain supportive, with default rates not looking to increase significantly this year.

Levels of Attraction: This aids in allocating and making additions or withdrawals. This is not a recommendation to sell ultimately out of less attractive investments to purchase more attractive ones. Your allocation should be more than what looks attractive; It must also consider your risk tolerance, goals, current holdings, tax circumstances, and more. 

This material is being furnished for general educational purposes only. The material does not constitute advice or recommendations of any nature, including fiduciary investment advice. Investors should seek professional legal, financial, and tax advice before making any investment decisions.

May 2023 Market Update: Caution &#8211; Signs of Recession Ahead

May 2023 Market Update: Caution – Signs of Recession Ahead

Most of the allocations have stayed the same from last month. Defensive portfolio positioning remains the best strategy. Consensus earnings estimates may be too optimistic. Income is again an important driver of performance. 

"Overweight" means a more attractive buy, and "Underweight" means a less attractive buy and more attractive sell.  These are not recommendations, just tactical observations to help guide you. Consult with me before making any withdrawal or purchase decisions.

T. Rowe Price Global Asset Allocation
April 2023 Market Outlook Summary&#160;

April 2023 Market Outlook Summary 

Learn in more details what areas of the market look attractive and which do not by visiting:

 T. Rowe Price Global Asset Allocation April 2023

Example: In the sample chart below "Overweight" means attractive and "Underweight" means unattractive. For new contributions you may consider purchasing a money market fund short-term and for withdrawals you may consider reducing some of your equities/stocks and bonds. These are not recommendations, just observations. Consult with me before making any withdrawal or purchase decisions.

Watch My Summary
Example of an Equity Allocation

Example of an Equity Allocation

As of April 2023
Equity TypeNormalTacticalRelative
U.S. Large Companies52.5051.30-1.20
U.S. Small  Companies13.5014.30+0.80
International Large Co. 21.0019.40-1.60
International Small Co. 4.004.10+0.10
Emerging Markets  4.005.901.90
Real Assets Equities  5.005.00+0.00


In all cases, consult with your advisor before making any changes. These are observations and not necessarily recommendations.

Learn more About Attraction Levels
Example of a Bond/Loan Allocation

Example of a Bond/Loan Allocation

As of April 2023
Bonds/Loan TypeNormalTacticalRelative
U.S. Corp. Quality5551.3-3.7
International Quality1514.0-1.0
U.S. Treasury 1011.0+1.0
Global High Yield79.3+2.3
Floating Rate Loans 34.0+1.0
Emerging Markets 1010.5+0.5


In all cases, consult with your advisor before making any changes. These are observations and not necessarily recommendations.

JP Morgan's Alternative View
Example of an Equity Allocation

Example of an Equity Allocation

As of March 2023
Equity TypeNormalTacticalRelative
U.S. Large Companies52.5051.30-1.20
U.S. Small  Companies13.5014.300.80
International Large Co. 21.0019.40-1.60
International Small Co. 4.004.100.10
Emerging Markets  4.005.901.90
Real Assets Equities  5.005.000.00


In all cases, consult with your advisor before making any changes. These are observations and not necessarily recommendations.

Learn more About Attraction Levels
Example of a Bond/Loan Allocation

Example of a Bond/Loan Allocation

As of March 2023
Bonds/Loan TypeNormalTacticalRelative
U.S. Corp. Quality5551.3-3.70
International Quality1514.3-0.70
U.S. Treasury 1010.50.50
Global High Yield79.32.30
Floating Rate Loans 34.31.30
Emerging Markets 1010.50.50


In all cases, consult with your advisor before making any changes. These are observations and not necessarily recommendations.

JP Morgan's Alternative View

PAST MARKET UPDATES

Market Perspectives Update&#160;

Market Perspectives Update 

November 23th 2022 - It’s only been one month, but the consumer inflation surprise is encouraging. October consumer prices rose less than forecasted, pushing the annual rates down for both headline and core measures considerably from the previous month. Learn more in this months' Market Perspectives, featuring Charles Boettcher, Managing Director and Senior Portfolio Manager.

Watch Video

Past Messages of Market News You Can Use

Market News You Can Use

Market News You Can Use

Watch our Sept. 16 2022 Video report on the current market conditions, opportunities, strategies you need to know to plan your next action steps. However, remember successful investing is goal-focused and plan-driven, not market-driven.

Sources:

Watch
June 7th 2022&#160;

June 7th 2022 

Watch our June 7th video report on the current market conditions, opportunities, strategies you need to know to plan your next action steps. However, remember all successful investing is goal-focused and planning-driven. All failed investing is market-focused and current-outlook-driven.

Sources:

Watch

Video Times & Topics:    00:00  Are we at the bottom?    02:09  How long do recessions and bear markets last?   03:15  What's the typical one year comeback from the midterm election year pullback?    04:50  What happens when you fail at market timing?    09:09  What are the areas of opportunity, strategies, and solutions you should be considering?