Kevins Korner
Some day we’ll be able to look back at 2020 in amazement, wondering how the world could be so screwed up on so many fronts all at once. We’ve all faced incredible challenges in our everyday lives, scenarios that were unimaginable but seem to be hitting us with unrelenting fury this year. I’m afraid it may get worse before it gets better.
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As the shelter-in-place orders enter their eighth week, we're all getting a little cabin fever. I've burned through all of the episodes of Modern Family and Ghost Adventures on the DVR, and I've spent more time on Zoom the last eight weeks than I had cumulatively in my life.
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With the recent rally in stocks we've already recovered half of the dramatic pandemic-driven decline. Now is a good time to revisit where things stand and what we might expect moving forward. |
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Today is Good Friday, so markets are closed, and that's given me a chance to reflect on the past six weeks and think about all that's happened. |
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Just a quick update today to answer a couple of questions I've received from some of you.
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I appreciate that you are all probably very busy, so I'll keep this update brief, hope you and your loved ones are all safe and healthy. I know the stock market is not of primary concern to many of you, but if you are concerned please read on.
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A brief preface: while my focus is on the financial impacts of the coronavirus, I absolutely recognize that this is a humanitarian crisis. Please stay safe and smart, and pray for the vulnerable as we navigate this catastrophe together.
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In light of the continued volatility in the investment markets here's a quick summary of what we're working on to help you navigate this situation successfully.
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It's been a while (about 12 years) since I've sent out a market letter on a Sunday, but with all of the scary news circulating the past week I wanted to share some articles and info that I've found educational and informative this weekend.
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With the stock market experiencing a sharp sell-off the past few days, I thought I'd send out a quick note with three short ideas I've been sharing in conversations with some of you today.
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Sorry to take your mind off the joys of the holiday season, but given the recent market decline I wanted to get some info and thoughts out to you ASAP. But before we dive into finance, I wish you and your family the happiest of holiday seasons and best wishes for a stellar 2019!
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In light of the volatility in the investment markets the past few weeks I thought I'd share some information I've been studying that answer the two most common questions I've been hearing. I'll try to keep it brief and understandable, if you'd like more detail just let me know.
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Investment markets have awoken from a few years of mellowness with a vengeance this year. After a long period of record low volatility, the stock market has had three times more daily 1% moves than it had all of last year. This has understandably caught your attention, so I'd like to offer a few thoughts and links to the thoughts of others to help you navigate this period.
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Today the Dow suffered its second 1000-point decline in a week. And in between we had a 600-point rally. Certainly an eye-opening time, especially on the heels of many years of record low volatility in the stock market.
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February 2, 2018
If you haven't seen the news already, the Dow Jones Industrial Average (the Dow) dropped 665 points today. That's a big number, and the media has already been playing this up.
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A little over five weeks ago we had the second big election shock of 2016 (following the "Brexit" vote in June) when Donald Trump, a 3-to-1 underdog, won the US Presidential election. As the saying goes, "the markets hate surprises", and in my nearly 30 year career these are certainly two of the biggest surprises we've experienced.
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I recently spent three days at the SEI Strategic Advisor Council National Meeting, where leaders from SEI's Investment Management, Practice Management, Technology, and Trust Company segments provided us with a wealth of information and updates. While most of the information is probably not of interest to my typical client ("that's why we have you!"), there was one presentation in particular that could be of incredible value to you.
Over the past few years, the investment world has been a strange place. While asset classes typically move in and out of favor year to year as the chart from SEI below shows, large US stocks (as highlighted by the yellow blocks) have been one of the best performing asset classes for three straight years. To show what normal "in and out of favor movement" looks like I also highlighted international stocks, which have done better than US stocks in 8 of 15 years, worse in 7 of 15 years.
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As you've probably heard, the stock market has had a very rough start in 2016. The US stock market, as measured by the S&P500 Index, is down about 8% thus far in 2016. I know many of you have two main questions about this, and I'll try to answer them here as simply and concisely as I can. But as always you're welcome to call or email me if you'd like more info or to talk about your portfolio in particular.
Question #1: What is going on??
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Global stock markets had their roughest week in a few years, culminating with sharp declines Thursday Aug 20 and Friday Aug 21. After an abnormally long period without a significant decline (3+ years!), this volatility will certainly capture the attention of both the media and investors. Is this the long-awaited 10-20% correction? Or just a temporary set-back? An honest person will give you the honest answer that no one knows for sure, but I'll give you some info and thoughts to help steer you through whatever the markets have in store.
First, a picture. Here is the S&P500 Index over the past 10 years:
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"There are decades where nothing happens, and there are weeks where decades happen"- Vladimir Ilyich Lenin
It's been an interesting couple of weeks in the world, thought it was time to share some thoughts with everyone on some of the issues dominating the news. I'll try to keep it brief, but feel free to contact me if you want to talk any of this through in more detail.
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"If the thunder cloud passes rain, so let it rain, rain down on him"-- from MLK by U2
The 2013-2014 rainfall season was the driest on record for the Bay Area (and the records date back to the mid-1800s!).
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Well, here we go! I'm officially taking the plunge into the blogoshpere, thanks for joining me!
The purpose of this post is simply to tell you what you can expect to find on my blog. Kind of laying out the framework if you will.
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