We thought we were finished seeing 1000-point moves in the Dow 30.  Just when things were settling down, Fed Chairman Powell threw a hand grenade at investors last week, reminding markets that we are not out of the woods yet.  His sentiments were not actually negative, but they failed to mirror the recent upward price action in equities.  What the Fed is doing is extraordinary.  The liquidity they are providing the markets (in different ways) is both powerful and comforting to investors.  For example, M1 growth (a money supply measure) has been the highest in over 50 years, much faster than during the Great Recession:

Bullish investors continue to see the Fed as a backstop for the markets and are taking comfort in the Fed’s  “whatever it takes” attitude.  Having the Fed on your side is a plus for investors.

Election day is less than five months away and the political picture is very ugly.  Throughout history we have seen all sorts of examples where recessions, bear markets, natural disasters, and civil unrest have impacted the outcome of an election.  These events usually work against the incumbent.  But with Americans so divided these days, it is likely to be a close race either way.  Based on current trends in the betting markets (PredictIt), President Trump’s chances at re-election have taken a hit.  While the president held a steady lead over Mr. Biden in April and May, the tide has started to turn in recent days, especially as civil unrest around the country has flared up.  PredictIt gives Joe Biden a six-point lead.

GLOBAL CONTRACTION IS EASING
RETAIL SALES JUMP 17.7% IN MAY

In 150 years of data, there has never been a recession that has spanned the globe to the extent of the 2020 version.  The World Bank estimates that nearly 93% of the world’s economies will see a decline in GDP this year.  This compares to 60% in 2008, and just over 80% during the depression of the 1930s.
 
By the time recessions are made official (ours was recently reported to have started in February), they are usually over or close to it.  Every region of the global economy recorded a sequential improvement in current conditions in May, while similarly every region of the global economy is reporting a positive six-month outlook.  The reopening of the U.S. economy is going well.  People are going to restaurants, salons, barbershops, stores, and casinos.  Airline traffic is picking up and people are driving more.  Tickets for the reopening of Disney World next month sold out in two minutes.
 
So does this mean a V-shaped recovery is now the likely possibility?  Not by any stretch.  Although a number of states are seeing declines in positive tests for the virus, a number of other states including Tennessee, Nevada, Oregon, Alabama, and Texas are reporting new highs in confirmed positive tests as reopening has continued.  And the possibility still remains of a second wave of the virus in autumn or winter.  Other concerns include whether the recovery can continue at this pace clouded by the uncertainty over future fiscal stimulus, the drag of unprecedented job losses on consumer finances, and the markets’ very rich valuations.  But we have to be objective and recognize good news when we see it:  the rebound in output we have been tracking continues for now. 

Knowledge – Results

Experts in Risk Management

Are you prepared for the next market correction or financial crisis?

Knowledge – Results

Experts in Risk Management

Are you prepared for the next market correction or financial crisis?

Knowledge – Results

Experts in Risk Management

Are you prepared for the next market correction or financial crisis?

Knowledge – Results

Experts in Risk Management

Are you prepared for the next market correction or financial crisis?

Real Retirement Solutions

designed to improve
  • Wealth Preservation
  • Management of Risky Assets
  • Peace of Mind

This is achieved through an ongoing assessment of market risks given your specific financial situation and goals.

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Professional Expertise

Leadership Team

Richard Furmanski

Richard Furmanski

CFA

has been a portfolio manager and analyst for over 35 years. He manages conservative, tax-efficient portfolios for both pre-retirees and retirees. His lower risk approach appeals to investors who want less volatility and competitive risk-adjusted returns.

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Mary Ellen Adam

Mary Ellen Adam

Director of Operations

has been in office administration for over twenty years. Her experience includes customer service, firm operations, and office administration. She interacts with our clients on a day-to-day basis and handles any requests that may arise.

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Frequently Asked Questions

If you can't find the answer to your questions here, feel free to give us a call at 847-847-2505

Do you manage both stock and bond portfolios?

Yes. We build a portfolio of conservative, high-quality stocks and hold them for the long-term. The average holding period is 4 – 5 years. Our focus is on stocks that are suitable for retirement portfolios.

Our high-quality bond portfolios are designed to provide both income and stability of principal. Bonds provide the anchor for balanced accounts (those holding both stocks and bonds).

What is your investment philosophy?
We take great care in purchasing only high-quality stocks and bonds intent on a multi-year holding period. Portfolio turnover and taxable realized gains are modest in comparison to other active managers. We do not time the market but will become more defensive, in terms of stock holdings, when market conditions warrant.
Will the portfolio be managed in accordance with my financial goals?
Yes. Each of our clients has a custom-tailored portfolio. These custom portfolios are designed to meet specific client objectives with a thoughtful approach to specific constraints such as risk tolerance. And as each client’s situation changes, the portfolio does as well. There is no cookie cutter approach.
What kind of expertise do you have and how can that help me in difficult markets?
We have been working with high-net-worth clients like you since 1982. Over that time we have helped them to navigate several bear markets and financial crises (including the stock market crash of 1987). We hold the Chartered Financial Analyst (CFA) and Certified Financial Planner (CFP) designations.
Are you sensitive to taxes when managing portfolios?
Yes. Our holding period for an individual stock averages 4 plus years which means our turnover is low and realized gains can be carefully managed. Further, where possible, we tax loss harvest small losses as a way of offsetting gains taken elsewhere in the portfolio.
How have you performed?
Results will differ by client and the level of customization but we have provided competitive investment returns for many years.
How do you charge for your services?
We charge a management or consultant fee based upon the size and level of customization of the account. As the account grows, we benefit together.

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Stay up to date with all of our latest comments and analysis.

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Monthly Updates

November 2024 Mid-Month Recap

As we mentioned in previous commentaries, Barron’s Big Money Poll represents the thoughts of large U.S. investment advisors. Their opinions and forecasts are what is discounted in stock and bond prices.  We think that is important. The recent fall edition of the Poll...

October 2024 Mid-Month Recap

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