NOT CHOOSING SIDES IN THE GROWTH VS. VALUE DERBY

While the global pandemic has impacted many facets of everyday life, it remains too early to say with certainty which changes will endure and which will prove temporary. In equity markets, the strong outperformance of Growth stocks relative to Value stocks has led many investors to question if they should be focusing their efforts solely on Growth investing. For the reasons discussed below, we remain committed to constructing a “Core” equity portfolio consisting of both Growth and Value stocks. Before diving into the numbers, the table below provides general characteristics…

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INVESTMENT COMMENTARY – THIRD QUARTER, 2021

Ripple Effects of Interest Rate Increases The stock market rallied consistently this year until the past month when the S&P 500 fell 5% due to several concerns. The Delta variant of COVID has slowed the economic rebound down due to less demand and persistent problems in supply chains. China also indicated that it would not financially support Evergrande, a financially unstable real estate development company, and the markets were spooked by fears of financial contagion. Finally, the Federal Reserve signaled that it would begin tapering its bond...

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LIQUIDITY AND HOW IT AFFECTS YOUR PORTFOLIO

Liquidity refers to the ability to purchase or sell an asset without drastically changing the price. Cash is considered to be the most liquid asset as it can easily be converted into other assets. Assets traded over an exchange like Exchange Traded Funds (ETFs) and most stocks, are liquid, as they are traded frequently and with relative ease. One way to measure liquidity is through the bid-ask spread. Bid refers to the price at which a buyer is willing to buy, and an ask is the price at which a…

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SOCIAL SECURITY AND RETIREMENT PLANNING

On August 31st, the Trustees of the Social Security System released their mandated annual report to Congress on the actuarial status and financial operations of the retirement and disability income trust funds, the Medicare Hospitalization Fund (Part A), and the Medicare Supplemental Medical Insurance Fund (Parts B & D). This year’s report was the 81st since the enactment of the Social Security Act (1935), and the first since the start of the Covid-19 pandemic. Not surprisingly, the solvency term, known as the “reserve depletion date,” of the existing retirement and…

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