Author Archives: Mark Gordon

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.

2021: Year in Review

Reviewing “Year 2021” feels very much like reviewing Year 2020: We’ve faced a major market-disrupting event, we are individually and collectively battling COVID, many of us are struggling to adapt, and our future feels quite uncertain. Also like 2020, despite mass disruption and uncertainly, global equity markets rose substantially.

“The Markets Take a Breath”

Since COVID vaccines became available, clients have asked us questions along the lines of “How long can stocks go up,” “What’s going to happen once the pandemic is over,” or simply “What’s next?”  Most clients, by now, can anticipate our answer: we don’t know. Yet that doesn’t mean we don’t know anything. Although we can’t predict what the markets will bring, it appears to our eye the markets are currently digesting several global and/or macro events. Depending on how they work out, markets could go up or down from here. We’ll discuss each of these in order of likely importance.

“I Love it When a Plan Comes Together!”

Hurrah! After a very tumultuous year, Q1 2021 provided many equity investors plenty to smile about. Globally, stocks continued their upward trajectory. Unlike most of last year, however, large-growth stocks did not appear to drive the returns. Instead, we saw value and small companies come roaring back. Today we’ll review last quarter’s equity returns, explain what might be driving up value and small stocks, and examine whether we are at the start of a long-term trend.

Q4 2020: Year in Review

Where to begin in a review of 2020? A global pandemic. An oil price collapse. An impeachment trial. A market crash. Wildfires on the West Coast. Floods on the East Coast. Lockdowns. Mass unemployment. Olympic Games postponed. Nationwide civil-rights protests. A contested election. Even murder hornets. One could be forgiven for expecting an investment review

Q2 2020: Lonely at the Top

As you may know, our recommended portfolios typically have a mix of large and small, growth and value, domestic and international. Most clients opening their quarterly statements will see Q2 returns roughly consistent with their respective benchmarks. Looking at the trailing year, however, will likely paint a different picture. For the 12 months ending June

Strategic Rebalancing in Bear Territory

We are currently in a bear market. Since its closing high on February 19th, the US stock market (represented by the S&P 500) has dropped approximately 20%, largely on concerns related to the worldwide impact of COVID-19 (the current coronavirus).¹ Foreign markets have experienced similar drops.

Mid-Year Review and Presidential Election Stock Returns

In the second quarter of 2019, stocks continued their year-long climb: global equities rose just over 3.5% and are now up over 16% as of the end of June. Domestic stocks fared marginally better than international equities. Last quarter, large US companies went up over 4% and, year-to-date, are up over 18%. Developed-foreign stocks rose over 3.5% and are up 14% year-to-date. Emerging-markets stocks rose under 1% and, as of the end of the quarter, are up more than 10%. The US bond market also went up significantly during the first half of the year. US bonds rose about 3% in each of the first two quarters and is now up over 6% for the year.

The Inverted Yield Curve: Harbinger of Doom or Yoga Position?

It took only three months for the markets to come back and then some: from January through March, global equities rose just over 12%. Despite these substantial gains, some investors have expressed pessimism about future returns due to the presence of an “inverted yield curve.” Over the past few months, we’ve seen many articles and news segments stating that the presence of an “inverted yield curve” has “predicted” a recession every time. Today we’ll explain what a yield curve is, what an inversion means, and why an inverted curve doesn’t necessarily mean a looming recession and/or poor returns.

2018 in Review: The Year of the Bear Cub

Most investors are happy to put 2018 behind them. To our eye, 2018 provided a dramatic rejoinder to the robust returns of 2017. That year the global equity markets, represented by the MSCI All Country World Index, rose over 20%, with emerging markets soaring over 37%. Last year, however, the equity markets returned some of those gains. Global equities were down about 9.5%. US stocks, represented by the S&P 500 Index, fared better than developed-foreign markets, represented by the MSCI EAFE Index, which went down 4.4% and 13.8%, respectively. Emerging markets fared the worst, dropping 14.6%.