INVESTMENT COMMENTARY – FOURTH QUARTER, 2021

Inflation and COVID dominated headlines in 2021 as the market plowed ahead to record highs. The two are related – COVID led to shutdowns which slowed both demand and production in 2020. Government reaction to the shutdowns was to stimulate the economy through easy monetary policy (low interest rates) and simply easy money (sending money directly into the pockets of consumers).

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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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INVESTMENT COMMENTARY – FIRST QUARTER, 2021

The US economy contracted by 2.3% last year as a result of the pandemic. Economic activity dropped precipitously in late March of 2020 and then rebounded strongly in the 3rd Quarter. Much of the contraction obviously related to the curtailment of in-person activities such as dining, travel, and entertainment. Consensus forecasts, which assume the vaccines protect against COVID variants and prevent another wave of infection, call for the economy to grow 6-7% this year. However, we expect the economic recovery to exceed expectations due to pent-up demand...

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