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.
We received great feedback on the articles we circulated in the first quarter of 2022, so we wanted to follow up with some more!
Here are seven recent pieces that our team members have read, along with some commentary on why we found the respective articles interesting.
Michael Garrison – Rollover Race Between Growth And Inflation
This article examines the race between economic growth and inflation and which will slow first. While the authors believe both will decelerate in the year ahead, the sequence of what rolls over first could have important near-term implications for the economy. If inflation slows first, the Fed could become more dovish in the fall, helping the economy avoid a recession. Regardless of the sequence of the economic or interest rate slowdown, once long-term rates stabilize, this will be positive for bond and equity markets.
Andrew Denenberg – Returns From the Bottom of Bear Markets
This article is from a couple of years ago, coincidentally written during the last significant stock market decline. Historically, forward returns following bear markets have been well in excess of the long-term average. That’s not to say that this will definitely be the case next year or the following, but so long as you don’t have a short-term need for the portion of your portfolio that is invested in the stock market, if history is any guide, things will be fine.
Tom Buhrmann – Market Forecasting Isn’t Like the Weather…
It’s a simple but effective message that hinders many investors…repeatedly. Human nature involves emotions, and unfortunately, emotions can get us into trouble. Often, we do the wrong thing at the wrong time, which in turn causes all sorts of unintended consequences. A client, who is a psychologist, recently told me: facts over feelings. At the moment, our minds will play all sorts of tricks on us and diminish our ability to think rationally or objectively. I think we’d all be better served to stop pretending we, or someone else, can see around the corner. Embrace short-term uncertainty and focus on long-term trends.
Michael Karmin – Price Go Up
I find inflation so interesting. In a micro sense, it is extremely personal to everyone (think grocery bills or gas prices), while from a more macro perspective, it seems to be really driving the recent volatility of financial markets. This article points out that the general direction of inflation (measured by year-over- year change) seems to have a bigger impact on stock market returns than the absolute levels of inflation. Specifically, the piece states that “when the level of inflation (CPI) is down from the prior year, the average return for the S&P 500 is 12%. When inflation is rising, the average return falls to 6%.” For the sake of our wallets and our stock portfolios, let’s hope inflation finally starts falling!
A.J. Price – When Bonds Do Not Hedge Stocks
I enjoyed this article from Morningstar, which illustrates the bond market’s struggles so far this year. While bonds often still have a place in a portfolio, we’ve been increasing exposure to alternative investments for many clients. In using alternative investments, we are looking for a differentiated stream of returns that can help navigate the challenging environment we’re in right now. One of our founders, David Copeland, just wrote an article about our approach to alternatives last week.
Cory Rappaport – Helping Clients Remain Resilient During Dynamic, Inflationary Times
This short piece does a great job putting some context around what challenges investors are facing in today’s environment: inflation, investor behavior, and large pockets of volatility. It provides thoughts on each from a financial advisor’s lens. Despite all the changes and circumstances today, it all comes back to planning. My main takeaway – It’s ok to make smaller tweaks as long as the big picture stays consistent!
I’ve been following the SECURE Act and the addition of the RISE & SHINE Act to get a better understanding of ways that the House and Senate hope to help retirement savers.
When the market goes down, people joke that their 401(k) is now a “201(k). “
By helping plan sponsors manage the things they can control, plan costs, and hidden fees, they can feel a bit more comfortable in the face of market volatility.
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.
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