At FAM Corp., we provide clients with regular commentary on the markets, current economic conditions and how they affect our clients’ portfolios. Here are some of our most recent reports:
3rd Quarter 2023 – The Congressional leadership returned to some semblance of sanity and finally passed a bill to keep the U.S. government funded for another few weeks, and the markets breathed a sigh of relief. But the third quarter was filled with drama, moderate losses, and a lot of day-to-day volatility. We are experiencing the part of the investment roller-coaster that tests the stomachs of investors and tempts people to jump off at the wrong time.
The market losses in the first three months of the year were spr
2nd Quarter 2023 – Fears of an imminent recession are getting kind of old at this writing; any investors who retreated some or all of their portfolios to the sidelines in anticipation that the economy was about to tank are now ruing their luck, as the markets delivered another quarter of solid returns. It’s another version of the lesson: listen to the pundits predicting disaster at your (financial) peril.
1st Quarter 2023 – Were last year's market losses an illusion? We've now experienced two consecutive quarters of healthy market gains, the long-predicted recession hasn't materialized despite rising interest rates and the Fed reducing its balance sheet--and oil prices have stabilized. So why are investors still so worried?
4th Quarter 2022 – Many investors are no doubt glad to see 2022 in the rear-view mirror, and if they do look back, the picture is not pretty. Stocks were buffeted by the Federal Reserve Board’s aggressive rate hikes (the fastest since the 1980s stagflation era) and the reverse of the QE policies which, for a decade or more, flooded the markets with liquidity.
3rd Quarter 2022 – Remember that nice little rally from mid-June until somewhere around mid-August, when the market returns seemed to be moving us out of bear market territory? Well, that upturn seems like a long time ago.
2nd Quarter 2022 – U.S. stocks entered true bear market territory in the middle of the second quarter and finished with the worst first six months’ return since 1970. Meanwhile, bond rates rose, causing bond investors to suffer paper losses as well.
1st Quarter 2022 – There’s no sugar-coating the news: the U.S. and global markets took a hit in the first three months of 2022, offering investors an experience that they haven’t been accustomed to during the long bull market This is a bit of red ink on their performance statements. The only bright spot is commodities, but it’s doubtful that anyone with recent experience at the pump is cheering the turmoil in global oil prices.
4th Quarter 2021 – We’ve been seeing a lot of cartoons and jokes lately about how it has felt like Groundhog Day, with 2021 being basically a repeat of 2020. The reference, of course is to the Covid pandemic, which raged through 2020 and then, when we all expected a return to normalcy, once again peaked (twice) during 2021 and continues to spread in record numbers. But the Groundhog Day analogy could just as easily be applied to the investment markets.
3rd Quarter 2021 – The string continues. The U.S. markets managed to eke out a sixth consecutive quarterly gain in the third quarter of the year, although most of the indices were down in the month of September. At the end of the quarter, stock investors were sitting on above-average gains and still, probably, feeling a bit uncertain about the future.
2nd Quarter 2021 – The U.S. investment markets continued to defy gravity in the second quarter of the year, closing out the month of June—and the first half of 2021—at new record highs. This is the fifth consecutive quarter where the U.S. markets posted gains. Everywhere you looked in a diversified portfolio, you saw gains in the second quarter. Looking at large cap stocks, the widely-quoted S&P 500 Index of large company stocks rose 8.17% in the second quarter, to post a 14.41% return so far this year.
1st Quarter 2021 – What a difference a year makes! Unlike the situation in the first quarter of 2020, U.S. stocks posted healthy gains since the start of the year, and there is optimism that the recent flurry of government checks to individual consumers, plus the huge infrastructure project on the drawing board, will give the economy a shot in the arm. Other countries are looking at the U.S. bull market with envy, and the American economy seems to have weathered its biggest challenge since at least 2008.
4th Quarter 2020 – It would be hard to imagine a stranger year in the U.S. investment markets than the one just passed, or a year that did a better job of defying logic. After the dramatic market collapse that began on February 20, and saw a 13% drop in the month of March, the U.S. investment world recovered nicely and sailed through a steep recession, record unemployment and three waves of a pandemic. The second-quarter saw a 32.9% annualized decline in the U.S. GDP, but by the time those statistics had been gathered, the U.S. indices were reaching new records. By the end of the year, the S&P 500 Index had gained more than 16% in a year of steep job losses and widespread pain, achieving record highs as the markets closed on December 31.
3rd Quarter 2020 – The investment results in September were certainly nothing to brag about, but overall the markets have done something interesting: large cap indices are up while small and midcap stocks have posted modest losses. Given the persistent decline in the U.S. economy and the uncertainties around the resurgent pandemic, the investment situation could have been a lot worse. Is it possible that in the midst of a raging pandemic that is experiencing its second wave, and the associated loss of GDP, that the markets will deliver a positive return for 2020?
2nd Quarter 2020 – This year, investors have been treated to a rare real-world lesson in the mathematics of investing—namely, the fact that after a market decline, it takes a greater market recovery to get back to even. The first quarter saw a frightening downturn that delivered 20% losses across the U.S. and developed foreign markets. Then we experienced a breathtaking 20% gain in the second quarter, the fourth-best quarterly rise since 1950. Work out the mathematics, and virtually all indices are still showing a loss for the year.
1st Quarter 2020 – You have managed to live through the worst first quarter on record in the U.S. investment markets. To put it mildly, the decade is not starting off well. You also endured the fastest, longest, hardest roller coaster ride in market history, as measured by the VIX volatility index. Basically, that means that one day the markets were down at record or near-record levels, and then as we thought perhaps the bear market would continue, we experienced near-record one-day gains.
4th Quarter 2019 – We have just completed the final quarter, not only of the year, but also the decade. It’s as good a time as any to reflect back on the market behavior for the past year, and also for the past 10 years. The short version is that we have experienced a bull market for the entire ten-year period, with no -20% bear market periods and only a few 10% corrections since June 2009.
3rd Quarter 2019 – The latest three month returns in the U.S. and international stock markets can be viewed with two very different attitudes. The first is that many indices (though not all) produced a loss for the quarter, and where there were gains, they tended to be very small. On the other hand, the losses, where they occurred, were too small to wipe out the gains of the previous two quarters, meaning that most investors have still made money so far this year.
2nd Quarter 2019 – If we could simply stop the year at this point, the gains would be unusually high for a typical 12-month period; for six months, they are extraordinary. Perhaps we should celebrate cautiously. How to make sense out of the recent market behavior? We experienced a painful decline in the last month of 2018 before the markets took a sharp (and unexpected) about-face and delivered the biggest one-quarter gain since the third quarter of 2009. The surprise upward trend has continued through the second quarter, albeit with more modest gains, despite what would normally be considered warning signs in the economy, the global trade markets and corporate earnings.
1st Quarter 2019 – The long, painful market decline in the last month of 2018 seemed to promise more of the same for the new year of 2019, but at the end of the first quarter, the results couldn’t have been more different. The U.S. market, measured by a variety of indices, posted its biggest one-quarter gain since the third quarter of 2009. This proves once again (as has been proven many, many times over) that you cannot extrapolate market returns from one month to the next, or expect that down or up trends will lead to more of the same.
4th Quarter 2018 – After logging strong returns in 2017, global equity markets delivered negative returns in US dollar terms in 2018. Common news stories in 2018 included reports on global economic growth, corporate earnings, record low unemployment in the US, the implementation of Brexit, US trade wars with China and other countries, and a flattening US Treasury yield curve.
3rd Quarter 2018 – If you believe that the trend is your friend, then perhaps the U.S. stock market is in for an excellent fourth quarter. U.S. equity markets suffered small losses in the first quarter, followed by decent single-digit gains in the second quarter.
2nd Quarter 2018 – The U.S. equity markets suffered a small setback in the first quarter, but the second quarter brought us back into positive territory. The widely-quoted S&P 500 Index of large company stocks gained 2.93% in value during the year’s second quarter, rallying to a 1.67% gain so far in 2018.
1st Quarter 2018 – Is the bull market finally over? For the first time in nine calendar quarters, the U.S. investment markets delivered a negative overall return. It was only a slight decline, but the decline reminds us that markets can and do go down from time to time.
4th Quarter 2017 – At the beginning of 2017, a common view among money managers and analysts was that the financial markets would not repeat their strong returns from 2016. Many cited the uncertain global economy, political turmoil in the US, implementation of Brexit, conflicts in the Middle East, North Korea’s weapons buildup, and other factors. The global equity markets defied their predications, with major equity indices in the US, developed ex-US, and emerging markets posting strong returns for the year.
3rd Quarter 2017 – The last few years of a bull market are always a bit of a mystery to professional investors; the market rises faster than it did in the early, cautious years when nobody believed there WAS a bull market, even though there appear to be fewer fundamental or economic reasons for it.
2nd Quarter 2017 – The U.S. stock market has more than tripled in value during the run‐up that started in March 2009, and the most recent quarter somehow managed to accelerate the upward trend.
1st Quarter 2017 – Are we in the late stages of a bull market—that time when the market suddenly takes off like a rocket for no apparent reason?
4th Quarter 2016 – You know you’re deep into a longstanding bull market when you see things like average pedestrians keeping one eye on the market tickers outside of brokerage houses to see when the Dow Jones Industrial Average has finally breached the 20,000 mark.
3rd Quarter 2016 -100 days after the Brexit scare and three quarters of a year after the most recent Fed rate hike, the markets once again confounded the instincts of nervous investors and went up instead of down.
2nd Quarter 2016 – It certainly feels like we’re in a bear market, what with the surprising “Brexit” vote in the UK, the dismal first few days of the year and increased volatility across the board.
1st Quarter 2016 – The first quarter of the New Year has brought us small positive returns in many of the U.S. market indices, which means that investors survived—for now, at least—the worst start to a calendar year ever for the U.S. stock market.
4th Quarter 2015 – In the year just past, we experienced many things—a prelude to a Presidential election, a renewal of terrorist concerns, a trip to Pluto—but in the investment markets, we will look back and yawn.
3rd Quarter 2015 – Many investors will be glad to finally see the end of the third quarter of 2015, and most of them will feel like their portfolios are worse off than they actually are.
2nd Quarter 2015 – For all the drama we’ve experienced in the past few months, the second quarter of the year has brought us slightly positive returns in many of the U.S and global indices, and disturbing but ultimately not harmful news in Europe, China and Puerto Rico.
1st Quarter 2015 – The first quarter of the new year has brought us small positive returns in many of the U.S. and global indices, and more than the usual amount of anxiety along with them.
4th Quarter 2014 – Looking back on 2014, people are going to say it was a great year to be an investor. They won’t remember how uncertain the journey felt right up to the last day of a year that saw the S&P 500 close at a record level on 53 different days.
3rd Quarter 2014 – You could say that the markets took a breather in the third quarter of 2014, but you would come to that conclusion only if you looked at the overall returns and ignored the drama of the past 30 days.
2nd Quarter 2014 – It’s hard to describe single-digit first half returns as a raging bull market, but it’s also hard to feel too negative about a six month period when the S&P 500 recorded 22 record highs and virtually everything – including bonds – rose in value.
1st Quarter 2014 – The U.S. stock market reported very modest gains in the first quarter of the year, and it was actually uncertain until the final trading day whether the quarterly returns would be slightly positive or negative. In the end, the Wilshire 5000 index--the broadest measure of U.S. stocks and bonds--rose 2.04% in the first three months of the year.
4th Quarter 2013 – The U.S. stock market punctuated an extraordinary year with gains on the last trading day, moving many of the American indexes to record highs on the final trading day for only the sixth tim e in history.
3rd Quarter 2013 – The third quarter ended with the threat of a government shutdown virtually guaranteed that the investment markets would close out the third quarter with a whimper rather than a bang.
2nd Quarter 2013 – It appears that the smooth sailing of the first quarter ended and volatility has returned to the investment markets. The widely-quoted S&P 500 index of large company stocks gained 2.36% for the quarter and is up 12.63% since January 1.
1st Quarter 2013 – In the first quarter of 2013, the U.S. equity markets continued the rally from last year. What the 2nd Quarter brings us is unknown, but we do expect a pullback from the current record levels.