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Archive by category: Quarterly NewsletterReturn
A Different Kind of March Madness
March Madness. It conjures up images of office pools, trash-talking and some of the best college basketball played all year. But 2020 saw a different kind of March Madness as the COVID-19 pandemic spread across the globe impacting the lives of hundreds of millions of people. As the number of cases began to rapidly grow, and the death toll mounted, social distancing and self quarantine guidelines were put in place in an attempt to flatten the curve and reduce the strain on our healthcare system. The result was a “self-induced” economic slow-down the likes of which we’ve never experienced as most non-essential businesses were asked to shut their doors.
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By now, you’ve probably seen a few – or a few thousand – retrospectives on the past year and the past 10 years … with a few 20-year reflections thrown in. Maybe it’s the nice, round new year number. Maybe it’s the surprisingly strong 2019 returns, even though there was plenty of room for doubt throughout. Or maybe it’s the wishful thinking that “2020” might finally offer us the perfect vision we’ve lacked so far. Whatever the reason, it can be entertaining to reminisce about the year just ended, and guess at what the next 12 months may bring. But, as Jeff Sommer of The New York Times said, “It is the time of year for predictions and I’ll make one: You will be better off ignoring the Wall Street stock-market predictions for 2020.”
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Third Quarter 2019 Newsletter

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If we asked you to hold your breath or stop blinking, how long could you do it? A minute, maybe two? Now, what if we asked how long you could go without being moved by the latest headline news? Impeachment unrest, Hong Kong protests, Brexit stress, climate change, inverted bond yields, the price of oil … you name it. There’s plenty to think about these days. We encourage you to consider how current events may shape the actions you’d like to take in your larger life. But topsy-turvy yield curves and all, nothing we’ve seen lately has altered our strategic recommendations on how to pursue your personal investment goals while managing the risks involved.
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Second Quarter 2019 Newsletter

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Q2 2019 Newsletter Amid tariff wars and temporary truces, Brexit bewilderment and historic Hong Kong rallies, the global thermometer isn’t the only gauge that may leave you and your investment temperament reeling between cooling chills and hot thrills this summer. Let’s take a refreshing journey back to May 2018, when the CFA Institute hosted its 71st Annual Conference in (of all places) Hong Kong. It’s also where Nobel Laureate and behavioral economist Daniel Kahneman presented how to improve on decisions by tuning out the “noise.”
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Everything Old is New Again There is always a newer, cooler investment to catch your interest.  The large majority of those may seem to be too good to be true, and usually are.  This phenomenon didn’t just start in the last few months, years, or decades.  See below for charts of a really old one and a fairly recent one.
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Current Market Volatility In Perspective After reaching an all-time market high on September 21st, the S&P 500 entered a bear market (20% decline) in late December, falling to levels last reached in early 2017.  Having experienced positive returns through September, the S&P was down just over 4% for the year.  All other domestic and international equity asset classes had greater full year losses.  Declines of this magnitude naturally cause one to wonder what the future holds and if they should make changes to their portfolios. While it may be difficult to remain calm during a substantial market decline, it is important to remember that volatility is a regular part of investing in stocks.  As a client of DHG Wealth Advisors, you’ve likely been invested through one of the five declines over 10% for the S&P 500 that we’ve experienced since 2008. The biggest, which was a 19% drop at the end of 2011, saw a recovery in just 5 months - although many take longer than that to recover.
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Happiness is a warm puppy  Many people would agree with the above statement.  A little, fuzzy, snuggly puppy keeping your lap warm would indeed make most people happy.  But what if the warmth was coming from the puppy urinating on you?  Would you feel the same?  Would your feelings about  a “warm puppy” be different in that scenario?  We have purposely used this tasteless example to underline the fact that a person’s expectation has a lot to do with their feelings.  If someone’s expectations are met, or exceeded, then most people are happy about that occurrence.  If something doesn’t meet expectations, then typically there is an unhappy or disappointed result.You may be asking what any of this have to do with your investment portfolio?  Quite a lot. With financial markets, there are known expectations.  Some basic, some more complex.  An example of a basic financial expectation is that stocks...
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The Incredible Shrinking Market  Over the last 20 years there has been an interesting phenomenon in the US stock market.   Simply stated, the number of listed stocks on US stock exchanges has decreased dramatically.  See Exhibit 1 below:Source: DFA Inc.Note that the number of listed stocks peaked in 1997 and has continued to decrease almost every year since.  Also notice that the number of foreign listed stocks has increased or remained stable during that time. To view this in another way, see Exhibit 2 below:Each year there are new stock listings and delistings. Note that in most years since 1996, there are a greater number of Delists than New Lists.  This continuing trend is happening for three basic reasons:   Public mergers and acquisitions   Private mergers and acquisitions (private equity)   Many new companies are staying longer in the private sector  Public mergers, such as Amazon buying Whole Foods or AT...
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Finally, Finally  After months and months of experiencing an extraordinary period of muted volatility, we finally encountered stock market fluctuations that have grabbed investors’ attention.  Below is a weekly bar chart of the S&P 500 Index:Each bar represents the high and low for one week, starting with the first week of January 2017 and ending with the last week of March 2018.  In case you have been glued to the Winter Olympics and March Madness and have not surfaced long enough to appreciate what has happened, this chart shows the incredible differences between the first 13 and the last 2 months of that period.  Not only was the difference between the weekly highs and lows dramatically tamer during the first 13 months, but the direction of the bars was primarily up or sideways, with no meaningful down periods. During February and March 2018 those trends changed.  There were meaningful differences between the highs and lows, and the direc...
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Days of Wine and Roses 2017 was a beautifully sweet, heady year for global stock markets.  Proof of this can be seen in the consistency of the performance of returns.  For the first time in the history of the world (literally), global stocks had 12 straight months of gains (as measured by the MSCI All Country Equity Index).  That means the last day of each month was higher than the first day of that month, for all 12 months -- the first time this has occurred since tracking began.* In addition, the S&P 500 set an all-time record for the number of days the index endured less than a 3% drawdown (over 300 days and counting).**  (*MarketWatch.com 12/27/2017 “Global stocks just made history by rising in every month of 2017”)  (**BusinessInsider.com 10/23/17 “The stock market just made history”)We will discuss the individual asset classes later in the report, but it suffices to say that things couldn’t get much better....
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