News

Investment Strategies and Tactics for Tricky Times

News, Quarterly Market Perspectives

As we wait for the financial world to react to events while unsure of what theme or themes will predominate economic thought in the future, there are some strategies and tactics to keep in mind during tricky times. A popular endowment model strategy is rebalancing a portfolio. As different sections of a por tfolio gain value quickly, or slowly, or even regress, the original, and hopefully optimal, asset allocation percentages change to something different. At various times, perhaps annually, the increased percentages are sold down to their original allocation and the funds raised are reinvested in the decreased percentage assets, thereby rebalancing. As a tactic to make some investors comfortable with the risk profile of their portfolios, this works. However, one author points out that he has “yet to see a study that shows it improves your returns,” and in fact it sometimes can mean “missing out on big returns.”[1] 

Read More
entry-list.php

Economic Growth Accelerating

News, Quarterly Market Perspectives

With the pandemic subsiding and economic growth reaccelerating, a Bloomberg survey of economists expects US real GDP to grow a robust 6.6% this year and 4.1% next. The economy (as measured by real GDP) is expected to have surpassed its pre-pandemic peak in the second quarter of 2021. The S&P 500 Index returned a strong 14.4% through the first half of the year to close at a record high. Pent-up demand and federal stimulus funds have meant that demand for goods and services has recovered much faster than supply. Businesses can’t hire workers fast enough and they’re struggling with supply chain bottlenecks. Strong economic conditions drove the Consumer Price Index (CPI) up 5.4% year-over-year in June, following up 5.0% y/y in May. While many economists had been expecting some inflation, these inflation statistics were higher than most of them, including many Fed officials, anticipated.[1] The CPI excluding food and energy was up 4.5% y/y in June, reaching its highest level since 1991.

Read More
entry-list.php entry-list.php

Regulatory Oversight and Inflation

News, Quarterly Market Perspectives
Regulatory Oversight and Inflation - Sizing up the risk of inflation falls on another large federal bureaucracy, the Federal Reserve

Measuring the effects of increased oversight and regulation brings us to the fiduciary rule: always putting the client’s interest ahead of our own. Since this is part of the Investment Company Act of 1940, we at Woodstock have been complying with this rule for all of our registered investment company life. We plan to follow it in the future.

Read More
entry-list.php

The Woodstock Advantage: Fiduciary Duty

News, Quarterly Market Perspectives
The Woodstock Advantage - your investment manager is able to take taxes into account

A number of the advantages of being at Woodstock often go overlooked. Under the Investment Company Act of 1940, your investment advisor owes you a fiduciary duty, which means putting your interest before his, hers, or the firm’s interests. Being invested in an individually managed account (“IMA”) at Woodstock means that you own the assets in your portfolio, unlike in a pooled investment vehicle where you are probably merely a creditor of the real owner.

Read More
entry-list.php

2021 Economy Could Soar: Pandemic Recedes

News, Quarterly Market Perspectives
2021 economy could soar - the US economy is expected to perform at the strongest growth rate in nearly 40 years

Over the past year the American economy has confronted unprecedented challenges. We haven’t seen the likes of COVID-19 during our lifetimes, with a severe human toll of more than 559,000 deaths in the United States and 2.8 million globally,[1] and the financial impacts it has had on all of us. As the COVID-19 pandemic began to rage early last year, individual state-mandated shutdowns across the country brought the US economy to an abrupt halt and caused a short but deep economic recession. Notably, by early April 2020, about 300 million Americans in 43 states and Washington, D.C. — over 90% of the population — were under stay-at-home or shelter-in-place directives to help contain the spread of the virus.[2]

Read More
entry-list.php

Household Wealth & Income Inequality

News, Quarterly Market Perspectives
Household Wealth & Income Inequality -- how to make the US tax system more fair

Understanding when news is good probably requires disregarding what’s called the “precautionary principle,” which is the rule that “strongly encourages caution among regulators working in any field with scientific uncertainty.”[1] Throwing caution to the wind, let’s look at the state of US household wealth and income inequality. The US Federal Reserve’s March 2021 quarterly release of household net worth data showed that “the value of Americans’ total assets minus their liabilities swelled to $122.9 trillion” at the end of 2020, up from $111.4 trillion at the end of 2019.[2] Further, when US Census Bureau data are adjusted to count all of the government’s transfer payments as “income” to recipients and when taxes paid are counted as “income lost” to taxpayers. then “income inequality” is lower than it was 50 years ago.[3] 

Read More
entry-list.php

Separately Managed Accounts

News, Quarterly Market Perspectives
Using separately managed accounts to control fees

Part of sleeping well at night, if you are invested in the financial markets, is trying to control or set limits on those elements of the financial markets that you can control: expenses and ownership. Being invested through a separately managed account (SMA) allows the portfolio manager to essentially eliminate the fee from consideration by using the tools of asset allocation and tax loss selling that minimizes taxes from recognized capital gains, to allow almost 100% of the annual gain in a portfolio to remain in the portfolio.

Read More
entry-list.php

The Limits of Monetary and Fiscal Policy

News, Quarterly Market Perspectives
the limits of monetary and fiscal policy in controlling market growth

What will 2021 bring? Two thousand twenty was a crazy year, and the S&P 500 Index returned 18.4%, having appreciated 31.5% in the prior year. The equity benchmark’s strong 2020 performance included the rapid, steep bear market brought about by COVID-19, followed by an equally dramatic recovery. The market started reaching new highs again by August and continued to reach new highs through year-end. If the pandemic can’t cause more lasting damage to stock prices, can anything?

Read More
entry-list.php

Socially Responsible & ESG Investing

News, Quarterly Market Perspectives
ethical socially responsible & ESG investing

Socially responsible investing (SRI). Integrating environmental, social, and governance (ESG) factors in the investment process. Applying principles for responsible investing (PRI) to investment decisions. Sustainable. Green. Ethical. Impact investing. These terms are all part of the socially conscious investment jargon getting a lot of “airtime” in the news media, particularly in financial circles. The goal for all of these investment styles is essentially the same, to produce a positive investment return and a positive impact on society and the environment.

Read More
entry-list.php
category.php