Skip to main content

Watch our latest video: "3Q2023 Market Review and Outlook for 2023"

I Stock 1065782416

What If I Gave You the Headlines of 2020?

Picture yourself one year ago — on December 15th, 2018. The S&P 500 just took a sharp downturn. After being up 10% in September, the market went negative. And then, a fortune teller hands you the following headlines for 2019:

  • The Federal Reserve will reverse course and lower interest rates three times due to a weakening economy
  • The Yield Curve will invert
  • The U.S. will experience the longest economic expansion in its history
  • S&P 500 Earnings per share will be on pace to contract 1.5% from 2018
  • Global PMI (Purchasing Managers’ Index) for Manufacturing will contract (go below 50) for the first time since 2012
  • Articles of Impeachment against President Trump will be voted on by the U.S. House of Representatives
  • The Trade War with China will drag on and not get resolved by year-end
  • Two of the Democratic Party front-runners for President in 2020 will be self-proclaimed socialists Bernie Sanders and Elizabeth Warren

Keep in mind, these are events that actually happened. Add in the usual fear mongering from the financial media and you get what amounts to an all-out assault on “staying the course.”

What would you have done? Likely, you would have hit the SELL ALL button and waited for this disaster-of-a-year to end. Surely there will be a better time to invest! Even the most rational person would all but guarantee a down year for the S&P 500, if not a complete collapse.

That brings us to today. The S&P 500 is on pace for its best year since 2013. Better yet, every major asset class has outperformed cash this year, and a diversified portfolio of stocks and bonds is up double digits. It didn’t really matter what your investment strategy was in 2019, so long as you stayed invested.

JPM Guide through 11/30/19Source: JPM Guide to the Markets through 11/30/19

Too often I hear comments suggesting, “I know X is going to happen next year, so I need to do Y.” Did that strategy work in 2019? If I gave you the headlines for 2020 today — if I told you who will win the U.S. Presidential Election, when the trade war will end, or what GDP growth will be, what would you do with that information? Chances are very likely that you would make bad changes to your portfolio.

The bottom-line: Fear and greed are the two most damaging impulses to have while developing an investment strategy. And 2019 should serve as yet another lesson on the value of developing a solid portfolio strategy with the guidance of a professional financial advisor, and sticking to your plan.

Related Insights
I Stock 471219895

Investing 101: It's Not Just a Man's World

As Socrates once said, “Awareness of ignorance is the beginning of wisdom.” If you recognize a lack of proficiency, don’t be afraid to educate yourself. Of course, we all know we can’t be experts on every topic, but gaining a basic understanding that will help you ask the right questions will benefit you in the long run.

Personal finance is no different. Dismiss the notion that "the world of finance is a guy’s thing” and become more proactive about learning the basics. It will truly benefit your personal financial freedom! Check out these basic Investing 101 terms.

Read More
Trick Or Treat

Tricks or Treats – What Comes Next?

As a kid, I always enjoyed Halloween. I would dress up in some particularly fun costume, usually something scary. As I went from house to house gathering candy with my friends, I would often see someone’s carved pumpkin lying in the road, clearly a victim of some hooligan’s prank. It was a reminder that, even in good times, negative influences exist around us.

Today, as we approach the Halloween holiday, we wonder whether the rest of the year will find our meticulously carved pumpkin (stock and bond) portfolios smashed on Wall Street. Just as we see on Halloween, there are now many frightening and disturbing “tricks” in the economy today, and we’re hoping to safely make it home (the end of the year) to enjoy what “treats” we hope to have in our investment bags.

Read More
HUDDLE Investment Blog Banner Image

The Fed vs. the Consumer

Since the Federal Reserve began raising interest rates in March of 2022, there has been a pitched battle of “chicken” between the Fed and the average consumer. The Fed began raising rates about a year after inflation started a dramatic climb to its highest level in some 41 years. Those rate hikes have amounted to five percentage points on the Fed's benchmark to a level not seen since 2007. As a result, all sorts of loans tied to short-term interest rates have skyrocketed. These include credit card rates, home equity lines of credit, car loans, personal loans, and business loans.

The Fed has done its best to force higher borrowing rates on individuals and corporations in the hope that meaningful layoffs will follow, thus driving inflation down over time by lessening demand for products and services. What the Fed did not count on was the resilience of the U.S. consumer, who is experiencing solid wage growth and continues to spend on travel and dining out. Learn more about 2Q2023 and what may be ahead in remainder of 2023.

Read More
Play