Market Update

Over the last several years leading up to 2022 the acronym TINA was a very popular description for investment strategy. TINA stands for There is No Alternative (to stocks). The belief was that, with the Federal Reserve keeping interest rates at 0% and rushing to bail out the stock market each time it was in danger of declining significantly, stocks were the only place one could make any money. Certificates of deposit, government bonds, and money markets all offered extremely…

Journey Tree looks at investment returns over a long-term cycle that includes both up and down markets to ensure that clients get the returns they need with the least amount of risk. Due to a variety of factors, we have just been through an abnormally prolonged period of positive performance for both stocks and bonds. That highly unusual period fueled by low interest rates, government stimulus, and low inflation appears to have ended. Stock and bond markets have been artificially…

“No living investor has experienced a global pandemic or the extraordinary monetary and fiscal policies that have been deployed to keep economies afloat. Without a playbook in hand, investors should beware of assuming that trends in recent years will repeat in the future.” – Chris Hogbin, Alliance Bernstein The stock market rose to historic levels in 2021. By some counts, as many as 70 record highs were recorded during the year. Buoyed by rock bottom interest rates (making it cheap…

Today there are many signs that we are in an investment “bubble.”  Michael Finke, Professor of Wealth Management at The American College of Financial Services defines a bubble this way: “A bubble occurs when the price of an asset inflates well beyond its fundamental value.” He goes on to say, “Bubbles often form when the imaginations of investors (speculators?) are inflamed by unrealistic expectations, sharp price increases, and fear of missing out.” These descriptions could well apply to everything from…

The Pandemic Roller Coaster of 2020 2020 has been a year of volatile extremes in the investment world. Following exceptional returns for virtually all types of investments in 2019, the S&P 500 stock index registered an all-time high on February 19. Less than a month later by March 23 the index had dropped 34% –  the sharpest drop on record. Then, after unprecedented measures were announced by the Federal Reserve and Federal government, the S&P 500 shot up 30% over…

Market sentiment changed abruptly in February. After achieving a new all-time high on February 12, the Dow Jones Industrial Average declined just over 14% through February 28. The last week of February saw one of the largest weekly drops of the last 100 years. Given our defensive positioning most Journey Tree Accounts were down just 3-4% over that period. After rising 35% from December 24, 2018 to the peak on February 12, “[. . .] the Dow at nearly 30,000…

Caution Ahead “The question you should be asking yourself is, ‘Is it a good time to take more risk or less risk?’”                                                                                                      -Howard Marks, Oaktree Capital This question is constantly…

As of June 26th, all the major indices were up for the year-to-date (YTD), but while Q1 was overwhelmingly positive for all the asset classes, volatility and uncertainty have returned in May and thus far in June. In fact, the only consistent upward trajectory, in terms of price, has been experienced by the two bond indices, U.S. and Global. The stock market had a strong reaction in May to: Brexit – Theresa May indicated at the end of May that…