We work with a broad range of clients to provide comprehensive financial planning, while bringing cooperation, synergy and integrity to every client relationship.
Clients and friends,
During times of high volatility, an inevitable and recurring part of the long-term investment process, we would like to communicate some of the data and analysis shaping portfolio structure and strategy.
The commentary from these two firms is relevant to our 2022-2024 outlook. Keep in mind, we de-risked the portfolios in June of 2021 and again in January 2022. To use an analogy relevant to being a pilot, when the air ahead looked turbulent, we looked for smoother air and have also remained on course. While we are well positioned against benchmarks in our diversified portfolios YTD and trailing 12 months, any significant selloffs and downturns can be unnerving to investors. We remain steadfast in our efforts to meet your needs, whether that is retirement income or growing your wealth or somewhere in between.
As always, call us to chat if you have concerns that we should discuss.
Don't Panic - A Bull Case for Equities
Reducing our Stock Market Forecasts
Spring has Sprung! We see people trying to get outside again and enjoying the beautiful colors that Spring brings to us. We hope you get a chance to spend some time outdoors as the weather warms a bit.
We wish we could say equity and bond markets were as bright as those Cherry Blossoms, Magnolias, Red Buds and Tulips to name a few beautifully budding plants. As these bloom, it seems that the markets are the allergens of Spring, bringing sniffles and congestion to an otherwise wonderful season. The current investment environment certainly feels like allergy season. This is a period that reminds us a bit of the “taper tantrum” of 2013 when the Federal Reserve spoke of tapering bond purchases, a measure to reduce the amount of cash in the financial system. At that time, tapering was just merely mentioned. This time the Fed is actually tapering and raising rates, furthering the agenda to reduce the amount of cash in the financial system. Too much cash in the system (Fed, Treasury and Congress) nearly always leads to inflation.
So why is the market so uptight about this? The most simple answer is that tapering and increased rates cause the economy to slow down. And nobody wants to see a slowdown turn into the R word (rhymes with procession). While there is discussion about the R word there are as many key indicators trending up or level (unemployment, consumer confidence, consumer balance sheets, manufacturing orders) than are trending sideways or down (inflation, rising rates, real estate prices and oil prices). Volatility is likely justified as the Fed cools off the economy a bit and market seek equilibrium.
Additionally, the Conference Board publishes their economic indicators and after a recent upward tick in their leading economic indicators (LEI) they wrote, “The US LEI rose again in March despite headwinds from the war in Ukraine,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “This broad-based improvement signals economic growth is likely to continue through 2022 despite volatile stock prices and weakening business and consumer expectations. The Conference Board projects 3.0 percent year-over-year US GDP growth in 2022, which is slower than the 5.6 percent pace of 2021, but still well above pre-covid trend. This rate also reflects a 0.5 ppt downgrade incorporated in our base case to include the effects of the war in Ukraine compared to before the war (3.5 percent). However, downside risks to the growth outlook remain, associated with intensification of supply chain disruptions and inflation linked to lingering pandemic shutdowns and the war, as well as with tightening monetary policy and persistent labor shortages.”*
Finally, data shows that the municipal bond market, in instances of drawdowns, can see a recovery period as soon as 3 months to 6 months. Perhaps this time may take a bit longer for such recovery, however, if we are patient, we may see that volatility diminish and return to a more normal period of stability in those markets. That may also prove to be true in the equity markets, an area of investing where we are all used to seeing ups and downs, corrections, tantrums of all sorts and in the end has proven to provide the best asset class to combat the cost of inflation.
Our conclusion is that a well-diversified portfolio, which you have if you are invested with us, has proven to be the best method to achieve your current needs and your long-term objectives. If you are concerned about equity and/or bond market volatility and wish to review your portfolio risk level, please reach out to us. Otherwise, we will seek opportunities to recover quicker as we always have.
Thank you for allowing us to be of service. As a Syntegra Private Wealth Group client, we value you and your business.
Please join the Syntegra team in congratulating our founding partners, Tom Burke & Jeff Fiehler, on being named to the Forbes Best-In-State Wealth Advisors ranking for 2022!!
"The talent of success is nothing more than doing what you can do well; and doing well whatever you do..." Henry Wadsworth Longfellow This quote sums up the careers of both Tom and Jeff. Our team is so proud to have you as our leaders, and we couldn't be happier for you.
Congratulations on your well-deserved success!
Each advisor—selected by SHOOK Research—is chosen based on an algorithm of qualitative and quantitative criteria, including in-person interviews, compliance records, revenue produced and more.
* Securities America and its representatives do not provide tax advice.