Month: December 2024

In looking at the universe of investable assets, there are warning signs. Recently, JP Morgan CEO Jamie Dimon lamented that public companies currently number 4,300 in the US, down from 7,300 in 1996. He cited some of the reasons companies are hesitant to go public: “increasingly burdensome regulation, intensifying public scrutiny and a growing obsession with short-term financial results.”[1]  The article highlights the growth in the number of companies choosing to remain private, backed by private equity.

We have often been asked “how should we be positioning our portfolios for the incoming administration?” One can make incremental changes to investments on the margin, tilting a portfolio to favor a particular outcome depending on what policies one expects to gain traction. It is difficult to predict these outcomes with any certainty, and this year has been no different. Therefore, gambling on one or another candidate or party victory generally does not warrant dramatic adjustments to a portfolio. This year, with the odds split on a winner in the months leading up to November 5th, we stuck to owning companies that we expected would prosper under either party’s victor, and would be capable of riding out any short-term volatility from post-election results.

This year’s cost of living adjustment (COLA) for Social Security recipients is expected to be 2.5 percent.[1]  Last year’s increase was over 8 percent. This is overshadowed by the Social Security Administration’s board of trustees report in May that “the trust funds for the Old-Age and Survivors Insurance and Disability Insurance programs are on course to be depleted (2035) and will only be able to pay out 83% of scheduled benefits.”[2] Potential and current beneficiaries of the program don’t seem to be panicking. The assumption seems to be that the elected politicians will not have the stomach to reduce benefits or stop annual increases. The economists who believe cutting taxes increases federal revenue assert that we can grow our way out of the problem with the right fiscal policies. Comparing percentages to gross domestic product (GDP), “it is hard to find a sustained reduction in government receipts attributable to tax cuts”[3] from the 1980s to now.

Woodstock prides itself on taking care of its clients, and we periodically like to use QMP to shine a spotlight on how individuals at Woodstock impact the larger community. In this holiday season of giving, we highlight the Boston-area nonprofit started by Lisa Supple, vice president and portfolio manager at Woodstock Corporation. For Pete’s Sake is a 501(c)(3) that funds hockey camp scholarships for children in inner-city Boston neighborhoods, formed as a way to honor the memory of her friend and former colleague Peter W. Smith, who died tragically in a fire in Boston’s North End on November 22, 2017.