Author Archives: Mark Gordon

The Magnificent One

Nvidia is such a highflyer that it is threatening to outpace the rest of the Magnificent Seven the same way the Magnificent Seven have outpaced the rest of the S&P 500…

A Change in Trends

Last quarter, stocks took back some of the robust returns investors enjoyed through the first half of the year.

The Recession That Wasn’t

Last quarter treated investors to continuing strong equity returns. Global equites rose over 6% and are now up nearly 14% as of the end of June. Domestic equities saw particularly strong gains: nearly 9% for the second quarter. Global bond markets held their value: US bonds were down less than 1% and foreign bonds were up less than 1%.

How Will Wealth Architects Help Navigate a US Default?

Over the past several weeks, we’ve seen daily stories about the United States’ “debt ceiling” and whether the US might default on its debt. We’ve been working on a debt-ceiling explainer, but a recent conversation with a client has changed our focus.

First Quarter Review and Year in Review 2022 Part 2: Bonds

Last quarter we reviewed 2022 equity returns. Although most equity indices went down last year, we saw that diversifying stock portfolios by adding small and value stocks likely helped blunt the bear market blow.¹ Today we’d like to follow up by reviewing bond returns of 2022. But first, a quick look at the capital-market returns from this past quarter.

The FAANGs Bite Back

In 2013, financial TV host Jim Cramer popularized the acronym “FANG” referring to four large tech companies: Facebook, Amazon, Netflix, and Google. He grouped them because they had experienced outsized market gains. In 2017, commenters added Apple to the group and referred to the five companies as “FAANG” or “the FAANGs.” Although the long-term returns for these companies are solid, investors who piled into them based on the recent past have been treated to grievous losses.

2022: Year in Review
When is a “Bear Market” not a Bear Market?

Technically, a bear market occurs when stocks lose 20% or more of their value from top to bottom.³ But not all stocks go down in a bear market. Thus, when pundits refer to a “Bear Market,” they refer to a drop in the value of one or more major stock indices. Today we’ll examine the returns from other areas of the US market and explain why, despite the headlines, not all investors faced a bear market in 2022.

Q3 2022: Perspective on the Bear

Last quarter saw the bear market continue. Global stocks went down almost 7%¹ and US bonds lost almost 5%.² We’ve seen several positive indicators, but war, inflation and a potential recession have battered the markets. Recently a client asked me, given the bear market and bad news, “How can you be so calm?” In the moment, I said something to the effect of, “It’s a combination of belief and experience.” Since that conversation, however, I’ve been thinking more about the question, particularly in light of the “Bear Market Toolkit” we released last quarter.

Q2 2022: A Bear Market Toolkit

Last quarter was undoubtedly difficult for investors. Stocks went down across the globe. The US stock market dropped about 16%. In a pattern reversal, international stocks fared modestly better. Developed-foreign markets slipped 13% and emerging markets went down about 10%. Bond holders also experienced losses: the US bond market dipped almost 5%.

Diversification in Difficult Times

Markets were not kind to investors during the first quarter. Global stocks dipped almost 5.5%.1 Most all equity asset classes were down: US stocks dropped just over 4.5%, developed-foreign markets lost almost 6% and emerging markets went down almost 7%.2 In fact, across the major equity classes, we saw only two positive results.