Experienced several high-profile client acquisitions and continued AUM growth
Expanded our team with the addition of Jodi Rose (Michael’s sister) who will assume the role of Executive Assistant/Office Manager
Team
A Review of our 2020 Investment Outlook
We conducted an informal straw poll of Investment Committee and Investments Team members, and asked them for their highest conviction “calls” for 2020.
2021 TOP 10 THEMES
vs
WHAT HAPPENED
After strong performance for most asset classes in 2019, we have modest return expectations in 2020 (i.e.: positive but below average returns).
Despite the COVID-19 pandemic and related turmoil, global equities have performed extremely well this year with the MSCI World Index +14.06%. Pre-COVID, Wall Street analysts were forecasting an average of +3.32% for the S&P 500 (+16.26% Actual). Fixed income (Bloomberg Barclays Global AGG) performed better than 2019 due to continued rate cuts.
Valuations and risk-reward dynamics seem to favor value stocks over growth and International and Emerging Markets over US (equities and fixed income).
International Developed (+8.16%) and International Emerging markets (-4.59%) lagged the S&P 500 (+26.89%) and Dow Jones (+21.35%).
Several developed and emerging markets outperformed US Equity + Fixed Income markets (Korea, China, Netherlands).
Modest global and US GDP growth, no immediate signs of recession.
Global and US GDP dove sharply in Q2 due to COVID-19, but sharply rebounded in Q3/Q4 when countries began to resume economic activity. Global GDP still remains lower than at the start of the year. The impacts to the economy appear to be self-induced and short lived.
Monetary Policy – Fed takes a long pause; rates remain unchanged with a chance of 1 decrease in the second half of the year.
During two unscheduled meetings in March, the Fed reduced rates by 1 1⁄2 percent to nearly 0. The Fed expects to keep rates near 0 until 2023.
Consumer confidence which has been steadily on the rise for the past decade, begins to decline.
The Consumer Confidence Index dropped by about -23% in 2020.
S&P profits increase, but P/E multiples contract.
Market appreciation was broadly due to multiple expansion and not S&P profit growth. The most recent Yardeni research estimates full year S&P earning declines of -16.8%
Volatility as measured by the VIX spikes as geopolitical risks (i.e. trade wars (China) and real wars (Iran)) along with US presidential elections dominate headlines.
The VIX spike to 82.69 in March. This is the highest ever daily close for the index. The VIX stayed highly elevated through the remainder of the year, finishing at 22.75.
For investors who are able to bear some illiquidity, private markets (equity, credit, hedge funds, and real estate), offer diversification benefits and higher potential returns compared to public markets, especially late in an economic expansion.
Most alternative investment strategies had a strong performance with the exception of real estate.
ESG/Sustainable investing continues to gain traction as investors want to align their personal values with their investment portfolios.
At the end of 2020, ESG investing represented 33% of all U.S. assets under management. Between 2018 and 2020, total US ESG AUM grew +42%.
Equity returns show more breadth and less reliance on tech stocks (i.e. FAANG).
Mega-cap technology stocks greatly outperformed the broader markets. The S&P 500 was up +16.26% vs +8.44% for the index – ex-information technology.
2021 Investment Outlook
We conducted an informal straw poll of Investment Committee and Investments Team members, and asked them for their highest conviction“ calls” for 2022.
1. Demand for municipal debt will remain highly elevated with high tax- bracket investors looking for after-tax yield.
2. International and Emerging Markets performing strongly on the foundations of a weaker dollar, attractive valuations, and higher growth.
3. Relations with other countries improve and forge to a more united global society.
4. Active management will become increasingly important in the coming years due to dislocations in the market.
5. Immense fiscal stimulus and post-COVID pent-up demand will lead to a continued steepening of the yield curve and pick-up of inflationary pressures.
6. Increase of discussion around higher taxes and regulations with new administration.
7. Volatility remains and stays elevated for the foreseeable future.
8. Alternative avenues for yield will become more popular (preferred securities, dividend-stocks, private & securitized credit).
9. M&A, PE, SPAC and startup activity to remain highly elevated; enormous amounts of cash on the sidelines privately and publicly.
10. Global GDP rebounds and begins a path toward continued growth.
The overall outlook continues to suggest that investors and advisors focus on diversification, patience, and an appropriate management of expectations.
We believe our client portfolios are appropriately allocated to take advantage of these themes, while remaining prudently diversified in the event that market conditions take an unexpected path.
Additional Investment Outlooks:
The Bespoke Report 2021 J.P.Morgan: Eye on the Market Outlook 2022 Byron Wein Top 10 Surprises for 2022
Investment Advisory Services provided through Rose Capital Advisors, LLC. Securities offered through Saxony Securities, Inc. Member FINRA/SIPC
Office News
Experienced several high-profile client acquisitions and continued AUM growth
Expanded our team with the addition of Jodi Rose (Michael’s sister) who will assume the role of Executive Assistant/Office Manager
Team
A Review of our 2020 Investment Outlook
We conducted an informal straw poll of Investment Committee and Investments Team members, and asked them for their highest conviction “calls” for 2020.
2021 TOP 10 THEMES
vs
WHAT HAPPENED
After strong performance for most asset classes in 2019, we have modest return expectations in 2020 (i.e.: positive but below average returns).
Despite the COVID-19 pandemic and related turmoil, global equities have performed extremely well this year with the MSCI World Index +14.06%. Pre-COVID, Wall Street analysts were forecasting an average of +3.32% for the S&P 500 (+16.26% Actual). Fixed income (Bloomberg Barclays Global AGG) performed better than 2019 due to continued rate cuts.
Valuations and risk-reward dynamics seem to favor value stocks over growth and International and Emerging Markets over US (equities and fixed income).
International Developed (+8.16%) and International Emerging markets (-4.59%) lagged the S&P 500 (+26.89%) and Dow Jones (+21.35%).
Several developed and emerging markets outperformed US Equity + Fixed Income markets (Korea, China, Netherlands).
Modest global and US GDP growth, no immediate signs of recession.
Global and US GDP dove sharply in Q2 due to COVID-19, but sharply rebounded in Q3/Q4 when countries began to resume economic activity. Global GDP still remains lower than at the start of the year. The impacts to the economy appear to be self-induced and short lived.
Monetary Policy – Fed takes a long pause; rates remain unchanged with a chance of 1 decrease in the second half of the year.
During two unscheduled meetings in March, the Fed reduced rates by 1 1⁄2 percent to nearly 0. The Fed expects to keep rates near 0 until 2023.
Consumer confidence which has been steadily on the rise for the past decade, begins to decline.
The Consumer Confidence Index dropped by about -23% in 2020.
S&P profits increase, but P/E multiples contract.
Market appreciation was broadly due to multiple expansion and not S&P profit growth. The most recent Yardeni research estimates full year S&P earning declines of -16.8%
Volatility as measured by the VIX spikes as geopolitical risks (i.e. trade wars (China) and real wars (Iran)) along with US presidential elections dominate headlines.
The VIX spike to 82.69 in March. This is the highest ever daily close for the index. The VIX stayed highly elevated through the remainder of the year, finishing at 22.75.
For investors who are able to bear some illiquidity, private markets (equity, credit, hedge funds, and real estate), offer diversification benefits and higher potential returns compared to public markets, especially late in an economic expansion.
Most alternative investment strategies had a strong performance with the exception of real estate.
ESG/Sustainable investing continues to gain traction as investors want to align their personal values with their investment portfolios.
At the end of 2020, ESG investing represented 33% of all U.S. assets under management. Between 2018 and 2020, total US ESG AUM grew +42%.
Equity returns show more breadth and less reliance on tech stocks (i.e. FAANG).
Mega-cap technology stocks greatly outperformed the broader markets. The S&P 500 was up +16.26% vs +8.44% for the index – ex-information technology.
2021 Investment Outlook
We conducted an informal straw poll of Investment Committee and Investments Team members, and asked them for their highest conviction“ calls” for 2022.
1.
Demand for municipal debt will remain highly elevated with high tax- bracket investors looking for after-tax yield.
2.
International and Emerging Markets performing strongly on the foundations of a weaker dollar, attractive valuations, and higher growth.
3.
Relations with other countries improve and forge to a more united global society.
4.
Active management will become increasingly important in the coming years due to dislocations in the market.
5.
Immense fiscal stimulus and post-COVID pent-up demand will lead to a continued steepening of the yield curve and pick-up of inflationary pressures.
6.
Increase of discussion around higher taxes and regulations with new administration.
7.
Volatility remains and stays elevated for the foreseeable future.
8.
Alternative avenues for yield will become more popular (preferred securities, dividend-stocks, private & securitized credit).
9.
M&A, PE, SPAC and startup activity to remain highly elevated; enormous amounts of cash on the sidelines privately and publicly.
10.
Global GDP rebounds and begins a path toward continued growth.
The overall outlook continues to suggest that investors and advisors focus on diversification, patience, and an appropriate management of expectations.
We believe our client portfolios are appropriately allocated to take advantage of these themes, while remaining prudently diversified in the event that market conditions take an unexpected path.
Additional Investment Outlooks:
The Bespoke Report 2021
J.P.Morgan: Eye on the Market Outlook 2022
Byron Wein Top 10 Surprises for 2022
Investment Advisory Services provided through Rose Capital Advisors, LLC. Securities offered through Saxony Securities, Inc. Member FINRA/SIPC
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View Full BioAs a Financial Advisor, Ashley works closely with high net worth individuals and families with a niche focus on female executives and entrepreneurs.
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