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May 2021 Recap & Outlook image

May was an eventful month and while the S&P fell ~4% at one point, crypto stole the volatility show. $ETH, for instance, rose ~50% during the first 12 days and then proceeded to fall >50% over the next 12 days before recovering some. While $BTC lost almost 50% of it's value, it didn't experience the gains $ETH had early in the month and thus is down substantially more over the same time period. If you look at some of the altcoins, some of them experienced drops of 80%+ raising many questions over whether crypto is an asset class or not. I have noticed that anytime there is a significant pullback in crypto in a short ...

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Q3 2020 Quarterly Update image

Q3 Market Update

Clients & Friends, In Q3, the theme of relation was ever present as we saw risk assets increase almost entirely across the board. Most people in my shoes continue to scratch their heads are we are in one of the worst economic periods in US history yet stocks continue to go up and up.  And it's not just that stocks continue to rise, but they're continuing to rise to incredibly high valuations from already high valuations during a time of great uncertainty.  Furthermore, the indices are becoming more and more concentrated as Apple, Amazon, Microsoft, Facebook, Netflix, Google and a few others weights increase within the index to record highs.  In the Nasdaq, Apple, Amazon and Microsoft now represent ...

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Q2 2020 Quarterly Update image

Quarter 2 Market Update

Who would have saw that coming? After experiencing a sudden and significant drop in March as the reality of COVID-19 set it, the S&P 500 logged a ~20% gain in Q2. Given that we're no way near out of the woods and economists are expecting defaults to surge (further), a lot of folks are asking (me) how long our markets will stay detached from economic reality. The Fed has certainly come to the rescue of the markets and have seem to put a floor under prices in many market segments such as stocks and high yield bonds. We treat the Fed like they're the firefighters when they're actually the arsonists As Jean de La Fontaine said, ...

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April 2019 Market Update & Outlook image

Monthly Recap Another busy month with GDP surprising to the upside, Uber preparing for an IPO and much more. To recap, here are just some of the noteworthy events and stories from April: President Trump pressured the Federal Reserve publicly to lower interest rates so the economy can "take off". GDP expanded at a 3.2 percent annualized rate in Q1 2019 on a big boost from inventories and trade that offset slowdowns in consumer and business spending. That followed a 2.2 percent advance in the prior three months.The Fed left rates unchanged when it met during the month. Powell said they view the recent slowdown in inflation as transitory. The Fed doesn't appear to be motivated to move ...

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March 2019 Market Update & Outlook image

Monthly Recap We saw a lot of data points in March along with an inverted yield curve, a Fed pivot and much, much more. To recap, here are just some of the noteworthy events and stories from March: The Mueller investigation wrapped up without any recommendation for further action, specifically against the President. It was a tense weekend while everyone waited for Barr's report. To Trump, it was vindication and the President took to twitter multiple times.US GDP was revised down to 2.2% from 2.6% in the 4th quarter of 2018. Economists surveyed by Bloomberg project that growth in GDP will slow to 1.5 percent in the first quarter, the slowest pace in two years.Beto O'Rouke announced ...

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Top Estate Planning Mistakes image

Estate planning is a crucial element of wealth management that our firm assists our clients with.  While we don't get paid to provide and write estate plans, we're very involved in this process for clients.  After countless meetings, conversations and research, below is a list of the most common mistakes in estate planning.   Failure to Create a Bypass Trust When First Spouse Dies:  In past years, the estate tax exemption was wasted when assets were left to the surviving spouse.  But under the current system, the deceased spouse's unused estate tax exemption can be used by the surviving spouse. Joint Tenants with Right of Survivorship Account Titling:  This designation is common when opening bank and brokerage accounts, but prevents ...

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Italy’s Banking Crisis image

As Europe struggles to understand the fallout of Brexit, there is a real crisis brewing. A very large and real concern in Europe are non-performing loans sitting on Italian banks balance sheets. These loans represent roughly 17% of the market which equates to €400 billion (at today's exchange rate comes to 25% of Italian GDP!).  The future for Italian banks will either be a bail-in (think what happened to Cyprus depositors) or a bail-out which is harder under EU guidelines.  The bail-in is, of course, a formula for bank runs.  And this will not only affect Italy.  Italian loans are packaged and resold as others, and Italian banks take loans from other European banks. These banks in turn have borrowed ...

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The 10 Best Days Propaganda image

    I read a tremendous amount of research as I should as portfolio manager on behalf of my clients.  Some is good, some is bad, some is wrong and others are what I like to call Wall Street propaganda.  Having worked at 4 large financial institutions in my career, I've seen this propaganda take many shapes through the years.  I recently was sent a research report from a well known asset manager (that shall not be named) which was perpetuating a myth I have seen my entire career in wealth management.  This myth is regarding missing the best 10, 20 and 30 days in the market.  As the myth goes (and is perpetuated), if you missed  the 10 best days ...

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The Credit Strategists Thoughts image

On Wednesday, John Mauldin posted a recent research from Michael Lewitt, author of The Credit Strategist where he discusses corporate debt, commodities, climate change, Obamacare and private equity.  One of the many hats I wear is research analyst  and I enjoy sharing unique and thought provoking viewpoints.  This one's a doozy and a great read. As John Mauldin highlights in his intro, the opening paragraph is blunt and to the point.  It starts "Commodity prices are plunging, the dollar is powering higher, the yield curve is flattening, ObamaCare is collapsing, global trade is plummeting and terrorism is spreading across the globe. The high yield credit markets are sending distress signals and 10-year swap spreads are negative. Energy companies are going out of business ...

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Rise of the Machine Advisors image

In the past few years there's been many new investment firms created such as Wealthfront, Betterment, Personal Capital, and many others, that claim to use technology to create better portfolios at a fraction of the cost.  They eliminate high fees and offer "sophisticated investment management and advice" as one of the popular websites claims.  For someone who doesn't want to work with a human advisor and who doesn't have the knowledge or time to research investments, these services can offer value over opening an online brokerage account and guessing on what to do next.  Besides, haven't we all heard the horror stories about the guy who stole money from his clients or the broker who lost your friend all ...

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