Market Review: Q2 2021

Market Update: Q2 2021

Even though the global stock and bond markets feel relatively calm as I write this, there’s been a whole heck of a lot that happened in Q1.  In no particular order, we saw:

  • A mob breach the capitol building
  • The entire GameStop saga
  • Virtually all crypto currencies post massive gains
  • A $1.9 trillion stimulus package passed
  • U.S. interest rates spike
  • An NFT (piece of digital artwork) sell for over $69 million

Perhaps my senses have dulled a bit over the last year, because that’s a whopper of a list for feeling relatively calm.

We are at a crossroads in the financial markets right now.  Stock prices continue to climb higher and break records, as investors have priced in a substantial economic recovery over the coming 18-24 months.  If the global economy is able to deliver that rebound the march upward should continue.  But any misstep or hiccup could send us into correction territory at the drop of a hat.

Here’s this quarter’s market review.

Market Review: Q2 2021

Market Review: Q2 2021 Market Review: Q2 2021

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Market Update Q1 2021

Market Update: Q1 2021

We’re now nearly a full month into 2021, and stocks, bonds, and virtually all other asset classes continue to post excellent returns.  The question is…..why?  We’re at a point where the market seems to be impervious to bad news.  Meanwhile bitcoin and cryptocurrencies continue to post new highs, and college students are even becoming famous for posting their trading strategies on social media.  As easy money central bank policies abound across the globe there is a lot of market froth out there.  We’re starting to see all the classic signs of a bubble.

Interestingly, equities in small cap and value shares led the pack in the fourth quarter of 2020.  This is the first quarter that’s happened for quite a while, but both areas have a lot more ground to cover if they’re to make up for the last decade.

Here’s this quarter’s market update.

Market Update Q1 2021

Market Update Q1 2021

Market Update Q1 2021

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Market Update Q4 2020

Market Update: Q3 2020

With the election right around the corner, Q3 was another hot quarter for global capital markets.  U.S. stocks appreciated considerably, and the bond market’s outlook for the economy improved as the yield curve steepened.  At the moment it seems like the markets are expecting another round of stimulus sometime soon.  Rumors of different packages have swirled around both sides of the aisle over the last three months.  As I write this, there appears to be a strong possibility that a bill is passed by the election.  If that doesn’t happen, we may be in for the volatility so many investors are expecting in early November.

This is an odd time, an odd year, and it’s hard to believe that stocks and bonds are both in positive territory after everything that’s happened.  But here we are.  Now is a good time to remind ourselves of a few core investment principles:

  • Diversification is your friend.  Both globally and across different asset classes.
  • Create a long term plan you can stick to.
  • Stick to that plan no matter what.

Easy enough, right?  Here’s this quarter’s market summary.

Q3 Market Update

Q3 Market Update

Q3 Market Update

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Q2 Market Update

Market Update: Q2 2020

Well that was an interesting quarter.  The second quarter of 2020 brought us the fastest selloff into a bear market in history, which subsequently turned out to be one of the shortest in history.  Equities around the world continue to whipsaw investors amid COVID-19 and the resulting fiscal and monetary stimulus packages from governments around the world.  In short, the markets seem to be at odds with the economy.

Interest rates have fallen in lockstep and show few signs of rising any time soon.  This makes for great refinancing opportunities for borrowers, but poor bond yields for long term investors.  These are interesting and precarious times.

Here is this quarter’s market update.

Q2 Market UpdateQ2 Market Update

Q2 Market Update

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Market Update: Q1 2020

Market Update: Q1 2020

Well here we are….one quarter into 2020, and the risk event we’ve all been waiting for has finally arrived.  Volatility as measured by the VIX Index touched all time highs over the first quarter as the Coronavirus spread from China to Italy and the rest of the world.

The stock slide here in the United States was fierce, but a late quarter bounce regained a substantial portion of the lost ground.  More ground, in my opinion, than the numbers really support.

From here, small cap and emerging markets are starting to look like wonderful bargains.  But without knowing the extent of the economic damage & how long the world will be sheltering in place, it’s difficult to make that argument with too much confidence.

Here’s this quarter’s market update.

Market Update: Q1 2020

Market Update: Q1 2020

Market Update: Q1 2020

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Market Update: Q4 2019

Market Update: Q4 2019

Picture what you were doing on January 1st of 2019.  Maybe you were getting an early start on your fitness goals for the year.  Maybe you were up early, ready to take in some New Year’s day football.  Maybe you were in bed all day nursing a hangover.

If I were to ask you what you thought the stock market would do in 2019, what would you have said?

Would you have guessed that 2019 was the year that the 10-year bull market finally came to and end?  Would you have said you had no idea?

What I’m guessing you wouldn’t have said was that the S&P 500 would be up 30% on the year, tossing market bears aside like leftover confetti from the night before.  At least I wouldn’t have.

Yet here we are, about one year later, and that’s exactly what happened.  And not only did the S&P climb 30% on the year, it did so in extremely steady fashion.  This was true in the fourth quarter of 2019, just as it was in the first three.

Could this be the year that the bull market wanes?  Read on for more details and background.

 

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