September 2022: Market Update: Stocks, Earnings, and Fair Value
This week we thought we’d better discuss the stock market and our latest thinking. In the past two weeks, the S&P 500 has declined by nearly 10% (as of this writing) and is back down to the lows for the year last reached in mid-June. Year-to-date (ytd), the S&P 500 has declined by almost 22%. […]
September 2022: Private Credit Holds Steady in Volatile Markets
So far, 2022 has been the worst year for fixed income markets since the Great Depression. The US Aggregate Bond Index (our fixed income benchmark) has lost 10.75% through August with the Global Aggregate Bond Index down 20.4%. Fortunately, our large allocations to Private Real Estate (+7.4% ytd return) and Private Credit (+1.1% ytd return) […]
July 2022: How Rates Impact Stocks and Bonds
There has been much discussion in the market this year regarding the rise in interest rates. It can be seen almost everywhere – The average 30-year fixed rate mortgage, which started 2022 at 3.11%, hit a high of 5.81% in June and currently sits at 5.51%. The 10-year US Treasury started the year at 1.51% […]
July 2022: Stocks, Bonds, and the Fed
Well, the first half of 2022 is in the books and for the broad financial markets and for passive investors it has been an absolute disaster. The most widely followed US Large Cap Stock index—the S&P 500—put up the second worst start since the Great Depression. Usually when stock markets are doing so poorly, bond […]
June 2022: Valuations and Long-Term Returns
This week I want to jump into the weeds with you and outline our current thinking on the stock market. On May 13th, I wrote: “The S&P 500 is now trading at 17.3x 2022 estimated eps vs its historical average forward P/E ratio of 16.7x. Analysts have increased their full year earnings estimate to 228. […]
June 2022: Discretionary Spending Declines
In our Weekly Thoughts note from 11/19/2021, we explained our thesis for weak consumer discretionary spending in 2022 based on a surge in the prices of necessary spending categories. At the conclusion of that note, we said: “All in, we would estimate that the non-discretionary basket of consumer spending has increased from 70% to around […]