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Weekly Market Commentary

Economic data releases really reaffirmed the strength in the US economy.  Manufacturing and services sectors moved to new highs. They also reported sharp increases in employment, at a pace not seen for over four years. Weekly Jobless Claims showed employers not willing to let go of employees. Overseas, business activity surveys reported steady growth in Germany, UK, Japan and India. Yet, US headlines continued to focus on the inflationary pressures from the rise in energy prices, which focus is no doubt exasperated by the upcoming midterm elections. The S&P 500 ended a volatile week up at 1.21% with Foreign Developed at 0.20% and Emerging Markets at 1.29%. In the US, Small Caps were negative. A rally in the AI trade technology stocks drove the positive... (click for more)

Benefits of Tactical

CLIENT-CENTRIC INVESTING: 
UTILIZING TACTICAL MANAGERS TO IMPROVE RISK/RETURN

Characteristics of Client Portfolios

The most common method for building multi-asset portfolios is based on Modern Portfolio Theory (MPT). The biggest issue we have with this approach is that it is not aligned with most investors’ view of risk. MPT utilizes a process that seeks an efficient portfolio with a given level of risk measured by return volatility. This misalignment manifests itself when the market is down 36%, and a portfolio is down 33%. In this case, the manager is patted on the back (receives a bonus) for outperforming their benchmark, and the investor is out 1/3 of their investment…  (click for more)

Monthly Market Commentary

The Fed watching game played out in a frenzy of parsing every word from the new Fed Chairman Warsh. A weak July Jobs Report and a slowdown in July Retail Sales beat back the drum beat for a September rate hike. Then the hawks jumped on Warsh’s speech from Jackson Hole and presto, through tortured reasoning, a rate hike in September was back on the table. With that, in the last week of the month, traders wiped out almost 60% of the gains in US Small Cap Equities for the month. The hard economic news showed a solid growth economy with growth accelerating in the manufacturing and services sectors and the consumer remaining resilient. Housing remains sluggish, constrained by a low supply of existing homes for sale and mortgage rates ..... (click for more)