July 2022
Our mission is to help you Preserve Your Assets and Protect Your Lifestyle. In this month's newsletter, we provide a quarterly market review with key observations from our three research partners. We share life perspectives in This in LIfe and provide you with a great workbook on how to protect yourself from scams. Enjoy!
As always, your well-being is everything to us. If you have any questions about your financial or investment plan, please contact us anytime.
Quarterly Market Review
We thought it would be beneficial to share with you some key observations from three of our research partners, along with an outline of our conclusions.
Littman Gregory:
Ned Davis Research Digest:
Schwab Market Perspective:
Facing a multi-decade high in inflation, aggressive monetary policy tightening by the Fed, and the effects of the Russia/Ukraine War, the US Economy and markets (stocks and bonds) struggled in the first half of 2022. Post pandemic, the US economy and asset markets greatly benefited from the epic jolt of trillions of dollars’ worth of liquidity doled out by the Fed and Congress. With liquidity drying up, a recession is likely and with weakening earnings and profit-margin outlooks, this is not a market likely to reward excessive risk-taking. The market is pricing in a fed funds rate of 3.8% by 2023, we think that may be too high to be sustained given the economic challenges facing the global economy.
Our Conclusions:
- Without a doubt a tough 1st half of the year for traditional stocks and bonds, we as a group are quite pleased with our proactive decision to reduce exposure to traditional bonds/stocks in 2021 and incorporate private debt/institutional real estate/CLO equity by adding our Alternative Income offering into our portfolio construction.
- Where we go from here is truly dependent on how successful the Fed is in tapping the brakes on the economy as they try to stem inflation. Our read is the economy is indeed in sluggish mode and the Fed would be best served to raise another 75 basis points in July and pause vs. continuing to raise rates, which would be akin to slamming on the brakes and having to reverse course.
- As the stock market’s decline in the 2nd quarter accelerated and economic data began to weaken, we have observed some weakness in alternative income. Not surprising as these are credit instruments and will be impacted when there is credit stress in our economy. On a relative basis, however, they have performed remarkably when compared to traditional stocks/bonds.
If you have questions about your portfolio, please contact us anytime.
This Is Life- "It is about you and your family."
Life Perspective from Pat Guinet, Founding Partner
Hung, Casey, and I are all proud fathers. Granted….. I am the “Old Guy” in the room with three boys Evan - 22yrs, Elliot - 24 yrs, and Brennan - 26 yrs. Hung has a boy, Gavin - 14, and a girl, Lauren - 12. Casey is the proud dad of two daughters: Taylor - 11 yrs and Blake - 9 yrs. I’m a little further along in the process of raising children, but would trade places with either of my partners to enjoy the years they are about to experience…. We are all at different stages of seeing our kids become independent, informed thinkers and at some point with families of their own.
My oldest recently graduated from UCI with a Bachelor of Arts degree in Film and Media Studies. It has been quite a journey for me watching Brennan change and grow over the years. He was a remarkable baseball athlete in high school and played a little in college before injuring his pitching arm. After baseball, I saw an athlete change into someone passionate about film and the making of movies. Yes… when one door closes, another opens….. After graduation in November 2020, the search began for a job. COVID was in our backyard, and like many of you, it impacted how we lived and performed at our jobs and our lives. Not the most memorable of times, but I think a time in all our lives when we began to appreciate the simple things.
Brennan was clearly concerned about whether his degree could land him a job in the “film industry”. A little bit of frustration and nervousness was evident. We chatted many times about what that next opportunity would look like for him. And….. I encouraged him to stay positive and simply keep pushing forward and trying to live his dream. As parents, we only want the best for our children. It’s fair to say both Casey, Hung and I would do anything for our kids. They are a big part of how we define ourselves as professionals and family men.
Brennan eventually went on several interviews in the industry at places like Netflix, MBS, and CBS Radford Studios with the help of friends and contacts. And …. I am proud to “report” that he was offered a position at Radford Studios as a Stage Manager. I know I sound like a proud parent, but my purpose for sharing with you this experience is far more basic. Brennan stood a little taller, had a bounce to his step, and clearly was very happy and I think a little relieved.
We all want the very best for our children. We circle the wagons and do everything we can to look out for their well-being. We worry about them. And …. when we see them HAPPY and MOVING FORWARD, we enjoy their happiness, not so much for ourselves, but for THEM.
As your advisors, we can always discuss financial planning and wealth management, but at the core of what we do, it is about you and your family. We hope our involvement with you and yours in your journey helps relieve some of the stress and challenges during times like these…
Warmly,
Hung, Casey, and Pat
Education to Empower You
Unfortunately, scams are everywhere. You have most likely received a fraudulent call, email or text where someone is trying to convince you to send money or provide personal information, believing it’s for a legitimate purpose or going to a trusted recipient. A scammer might also attempt to involve an individual as an intermediary using them to launder funds stolen from another individual, business, or government agency. Communications from scammers can originate from almost any source—including mail, email, social media, telephone, and text message—and are often made to appear as though they are from trustworthy parties. Scams are on the rise, and no one is immune. People of all ages and levels of financial experience have been and continue to be affected. The first step in protecting yourself from becoming a victim is to be aware of the types of scams and the telltale signs that one may have targeted you. The link below provides you with a workbook that outlines the most common scams and what you can do to protect yourself.
We are here to help and offer objective advice. If you would like to discuss any of these topics or any questions relating to financial planning and/or the markets, please click below and pick a time on our calendar.
