What We Have Been Reading – Market Commentary & Beyond

Our team regularly reads articles from industry peers and trusted resources to stay up to date on financial markets.  We enjoy reading about topics related to economics, investments, current events, and financial planning.

In addition to circulating some of the best pieces internally, we thought our clients, partners, and friends might enjoy reading some of the same articles as us.

Here are nine recent pieces that our team members have read, along with some commentary on why we found the respective articles interesting.

Ben Bremen: ‘Bond ladders are cool again,’ says advisor. Here’s how to capture higher Treasury bill yields

This short article explains how investors can take advantage of a higher level of interest rates with almost no credit or interest rate risk.  It’s an important reminder that there are benefits from higher interest rates – namely investors being able to earn potentially more return on their bond portfolio.  To boot, treasury bill ladders are now a staple for many SWP client portfolios.

Andrew Cohn: 401(k)s Increasingly Under Attack in Wake of SECURE 2.0 Passage

Business owners have taken plenty of risks to get the rewards they built by creating a profitable business. Business owners design 401k, Profit Sharing, and Cash Balance to help themselves and their employees to retire with a plan to replace the income they had while working.

Andrew Denenberg: S&P 500: 1926-2015 Chart

While not an article, I wanted to share this chart because it shows 1) the lack of importance of worrying about short time periods and 2) how the best hedge against risk is a long-time horizon.  

S&P 500: 1926-2015
Time Frame
Positive
Negative
Daily 54% 46%
Quarterly 68% 32%
One Year 74% 26%
5 Years 86% 14%
10 Years 94% 6%
20 Years 100% 0%
Source: Returns 2.0

Michael Garrison: Time Horizon is Everything For Investors

While this blog post is over a year old, I love how it focuses on the importance of time horizon in investing.   The anecdote on Amazon (it being a terrible short-term investment in 1999 but being a great long-term investment), as well as the rolling year information (showing that the U.S. stock market has never had negative returns over a 20-year window dating back to 1926), really highlights the impact a long-term horizon can have.

Michael Karmin: Hike, Pause, Cut

I have been much more interested in the moves of the interest rate market over the past year than the direction of the stock market. There seem to be competing forces between the Fed, who continues to raise rates, and the market, which seems to be pushing down rates. I don’t know where we go from here, but this article makes a compelling case for the Fed to have to cut rates sooner rather than later.

Kathy Klein: Where will the U.S. dollar go from here?

This is a great article from JPM that warns investors to watch for home bias in their portfolios. Despite international markets underperforming the U.S. markets for most of the past 15 years, the time may be approaching for international markets to resume the lead. This is all due to the most recent strength in the U.S. dollar, which is setting up a potential reversal. If the dollar weakens, historically, international markets outperform.

AJ Price: The Indexing Bomb

Investor behavior drives a substantial portion of long-term returns. As your portfolio value goes up over time, the same 20% market drop from five years ago suddenly has a much bigger dollar implication. So, while investing in index funds is a great idea for the equity portion of your portfolio, it’s important to allocate to other asset classes as well if it will allow you to remain disciplined and stick to your plan.

Neal Price: Ignorance Really Is Bliss When It Comes to Investing

I thought this was a great article on the perils of too much information.  Yes, “Knowledge is Good,” but sometimes too much knowledge spurs bad decisions.  Our best advice is often “Don’t over analyze, and don’t look too much.”  This summer, I’m going to try to apply those same concepts to my golf game.

Michael Tuber: Fed’s Powell vs. inflation vs. the markets

It’s no surprise that the market continues to grapple with conflicting data. While the Fed continues its attempt to achieve its dual mandate of price stability and full employment, investors are trying to make heads or tails of where we go from here. This article does a nice job of reviewing the short-term haziness created by recent bank struggles and how that dovetails with the Fed’s plans to combat inflation.

Conclusion:

We look forward to sharing more articles with you in the future. In the meantime, if you’d like to discuss how the topics in these pieces may apply to your own portfolio, please do not hesitate to reach out to a member of our team.


Disclosure:

This article contains general information that is not suitable for everyone. The information contained herein should not be constructed as personalized investment advice. Reading or utilizing this information does not create an advisory relationship. An advisory relationship can be established only after the following two events have been completed (1) our thorough review with you of all the relevant facts pertaining to a potential engagement; and (2) the execution of a Client Advisory Agreement. There is no guarantee that the views and opinions expressed in this article will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.

Strategic Wealth Partners (‘SWP’) is an SEC registered investment advisor with its principal place of business in the State of Illinois. The brochure is limited to the dissemination of general information pertaining to its investment advisory services, views on the market, and investment philosophy. Any subsequent, direct communication by SWP with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of SWP, please contact SWP or refer to the Investment Advisor Public Disclosure website (http://www.adviserinfo.sec.gov).

For additional information about SWP, including fees and services, send for our disclosure brochure as set forth on Form ADV from SWP using the contact information herein. Please read the disclosure brochure carefully before you invest or send money (http://www.stratwealth.com/legal).

Investments
Ignoring the Noise and Staying the Course:  A Recipe for Success
In today’s fast-paced world, it's easy to get caught up in the noise of predictions, forecasts, and market speculation. It's tempting to listen and react to predictions, but successful investing and sound financial planning involve tuning out the noise and taking a more disciplined, strategic approach.
Read More
Financial Planning
Nurturing Wealth Across Generations: A Guide to Multi-Generational Wealth Planning
Often referred to as the “Great Wealth Transfer,” studies show that roughly $84 trillion in assets amassed by baby boomers will change hands over the next 20 years. When examined more closely, a third of today’s high-net-worth individuals inherited their wealth.  According to the UBS Billionaire Ambitions Report, in 2023, more new billionaires were created by inherited wealth rather than entrepreneurship. This trend looks to continue in the years to come for many wealthy families (not just billionaires).
Read More
Financial Planning
The Benefits of Being a Co-Trustee on Your Parents or Loved Ones Accounts
As we watch our parents (or any other loved one) make that gradual shift from being totally independent to needing help, there are some steps that can be taken to facilitate family involvement.  Even for those of us who have parents who are 100% capable of managing their affairs, it doesn’t hurt to be prepared for an unexpected circumstance. The most common solution for being able to manage our parent’s accounts on their behalf is to have an attorney draft a Power of Attorney (“POA”).  A POA is a legal document that authorizes a person to act on another person’s behalf.  We highly recommend them for everyone 18 years and over, so they can have someone act on their behalf when they are no longer able to make financial or health care decisions.   It creates a fiduciary relationship between the Principal (person who created the document) and the Agent (person named to carry out the instructions).  This is my non-attorney understanding of how it works. 
Read More