“Been dazed and confused for so long, it’s not true...Lotsa people talkin’, few of them know...Don’t know where you’re going, only know just where you’ve been…” - Dazed and Confused, Led Zeppelin
This lyric is most appropriate for what the 1st half of 2022 has been like in the financial markets. We have experienced a barrage of issues like rising inflation and a war in Ukraine. Couple that with a number of back and forth moves and policy decisions and it’s no wonder investors are feeling dazed and confused. It sure has made my job more difficult.
Markets have had a damaging start to the year, with stocks and bonds both down year-to-date. Bonds were down 10%, the S&P 500 was down 20% and the tech heavy Nasdaq was down 29%. If there is any silver lining, we reduced risk in portfolios back in January and again in April so most of our client’s portfolios are down less than the overall markets.
As we head into the 2nd half of the year, I am seeing a rising probability of a slowdown in the US economy. The trend in the pace at which economic reports are exceeding or missing expectations has gone negative. While this doesn’t mean we are heading for a recession, it does mean a 2nd half recovery would require a significant improvement in the key heads like inflation and supply chain disruptions.
As such, we will continue to have a larger than normal allocation to cash and assets that are holding up better than the overall market.
July Calendar of Events (comments and additions for future months are always welcome)
- July is National Picnic and National Parks month – please enjoy being outside with family and friends.
July 1st Bureau of Internal Revenue (the IRS) founded in 1862– betcha nobody celebrates this birthday
July 4th Independence Day
July 11th My daughter Ryan’s birthday
July 17th National Ice Cream Day - Breyers vanilla with Hershey’s chocolate syrup is my go-to
I hope this report proves informative. Please reach out if you have any questions or concerns,
Sources: Bespoke Investment Group, Stockcharts.com, Kestra Investment Management
Although information herein has been obtained from sources deemed reliable, its accuracy and completeness are not asserted. All opinions and estimates included in this report constitute the judgment of the financial advisor as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.
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