Q2 2024 Commentary

KEY TAKEAWAYS

  • Strong U.S. Equities: U.S. stocks gained +3.22% in Q2 and over +23% in the past year, outperforming most asset classes except emerging markets in the last quarter.

  • Interest Rate Sensitivity: U.S. REITs outperformed non-U.S. REITs by over 400 basis points in Q2 and tend to perform well when rate hikes end. Fixed income assets watch Fed movements, with an inverted yield curve signaling potential recession, but not guaranteeing it.

  • Diversification and Long-term Investment: The tech sector led the stock market rally, but relying on a few mega-cap stocks is risky. Broad diversification is essential for long-term investment success.

Q1 2024 Commentary

Buoyed by relatively strong economic news, low volatility, signs of inflation slowing and expectations of Fed rate cuts on the horizon, U.S. stocks had one of the strongest first quarters in recent memory. U.S. equities gained over 10% in Q1 and posted a +29.29% return for the past 12 months.

Q4 2023 Commentary

Buoyed by the Santa Claus rally, expectations of Fed rate cuts, and a “soft landing” in 2024, the quarter ended December 31st was the strongest since early 2020. U.S stocks gained over 12% in Q4 to push their return to nearly +26% for the year. U.S. stocks easily outperformed international and emerging stocks (see chart below) for the period.

Q2 2023 Commentary

Even though people have been nervous about the markets and a looming recession all year, the markets have a way of surprising us. US stocks gained 8.4% in Q2 as per the S&P 500 and were up nearly 17% for the first six months of 2023. Meanwhile, the tech-heavy NASDAQ is up over 29% year to date. Not many saw that coming!  

Q1 2023 Commentary

Despite the scary headlines about bank failures, a looming recession, China tensions, natural disasters and stubbornly high inflation and interest rates, it was a great quarter for stocks. U.S. equities were up over 7% for the quarter ended March 31st and international stocks were up over 8%. We also saw an increase in bond prices during Q1, which we haven't seen in quite some time. In fact, U.S. bonds rose in value (not just yield) by almost 3% during the most recent quarter.  

Q4 2022 Commentary

As we start a new year, our team wanted to take a moment to reflect on the past quarter and 12 months to express our gratitude for your continued trust in our services.  While 2022 was a challenging year for many, we’re pleased to report that our investments substantially outperformed our benchmarks, and we expect more of the same in the coming years.  

Q3 2022 Commentary

October has a reputation for being the worst month of the year for investors. Some of the biggest market crashes have hit in October -- The Bank Panic of October 1907, Black Tuesday (October 1929), Black Monday (October 1987), and the darkest days of the global financial crisis (October 2008) when Lehman Brothers went under and AIG almost did. But research shows October is not the worst performing month of the year (September has that honor); it’s simply the most volatile month. As I’ll explain in a minute, volatility is not necessarily bad. But uncertainty is what’s driving the markets right now whether it’s concern over inflation, the war in Ukraine or how far will the Fed go with rate hikes.

Q2 2022 Commentary

We’re not going to sugarcoat it. The 2nd quarter (ended June 30th) was pretty negative in terms of returns for stocks, bonds and most other asset classes. You have to go back to 1970 (-21%) to find a time when the markets had a six-month decline as steep as we just endured. And you have to go back to 1969 to find a time when both stocks and bonds were in negative territory during the same year. Just remember, three months is a very short time in the investment world and the market has a short memory.

Q1 2022 Commentary

What happened in the U.S. and abroad?
With the highest inflation in 40 years, on top of Russia’s invasion of Ukraine, the Fed raising interest rates for the first time since 2018 and a new COVID variant emerging, there were plenty of headwinds for the economy and financial markets in Q1.

1st Quarter 2020 - Market Review

Above is a review of the first quarter 2020. As you are all likely aware the returns were not exactly great. At a high level US stocks fell 21% for the quarter while international and emerging market stocks fell 23% respectively. Returns were actually positive for the quarter and it was looking as if it was going be a great quarter until February 18th when stocks dropped 30% from then through March 31st.

A bright spot as I write this the markets are up 13% this month.

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