Every four years, the United States heads to the polls to determine who will lead the country’s executive branch. And every four years, fears soar that another term for the current president will further wreck the place, just as anxieties grow that a win for competitor assuredly will lead to disaster. Much as we’ll admit […]
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History shows that smaller-capitalization stocks have tended to outperform larger-cap stocks over time. Just not always. And just not for the recent past—this year in particular. It still seems far more reasonable to us to believe that it should be easier for small stocks to get big than it should be for larger stocks to […]
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With the global pandemic surging anew, governments around the world are developing additional measures to counteract the macroeconomic strain wrought by widespread illness and restrictive measures implemented to counteract its spread. Meantime, though still volatile, the domestic equity market sits just a few steps below its February peak. That apparent mismatch begs some questions we […]
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After the leap came the run. Stocks furthered a surge from the March trough, at one point gaining enough ground (in the States, at least), to turn green for the year. But the recovery in stocks was hobbled by the reality of a virus that very quickly took advantage of loosening restrictions on public gatherings. […]
The U.S. equity market rests just under 8% from its February 19 peak. Cue worries that we’ve come too far, too fast. Near-term stock valuations may look extended as revenue and earnings sink. There’s no end yet in sight for the pandemic, and U.S. elections are just around the corner. But, as the bulk of […]
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Among the equity market themes one learns early on is that market history is not prologue: past performance is not indicative of the future. We learn, too that market performance is not always positive. Another important premise is that diversification is your friend. These themes apply to the relative performance of the groups of stocks […]
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Value stocks have underperformed their Growth peers by a gap never wider in history, leaving some to suggest it’s time to throw in the towel. But history shows that when the performance on a long-held strategy is at its relative worst, generally speaking, it’s best to stay true to your defined approach. More than hope […]
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The first quarter of 2020—and hopefully only the first quarter—will go down in history as among the more chaotic periods of investable market activity. Though markets may be recovering, they likely will remain volatile as new data clarify the macroeconomic effects of the coronavirus outbreak and the supply tensions/demand drop-off in energy markets. That likely means recession or worse for perhaps part of Q1, most or all of Q2 and potentially beyond. This latest episode of market tumult is another stark example of the market’s ability to amp anxiety, even as we can recognize the events of the first quarter as echoes of similarly turbulent periods in history. We otherwise will seek to remain focused on stabilizing investment paths that route to longer-term financial outcomes.
Download PDF: Q120 SAM Market Review
Through the end of March in a pretty remarkable turn of trends, the domestic equity market rebounded 15% over the course of six trading days after the Federal Reserve let loose a rainbow of market support mechanisms and the U.S. Congress passed legislation worth more than $2 trillion in budgeted relief for U.S. businesses and workers. With peak-COVID in the U.S. likely still in the future, and with the macroeconomic impact still only very vaguely estimable, it’s easy to think up reasons to believe the rebound has gotten a bit ahead of the fundamentals. Even so, with the market still well off its February peak, we think history will show that patience amidst heightened volatility was rewarded over time.
Download PDF: 0420 SAM Commentary
