By now you have seen the media wish the bull market a happy 10th birthday (March 9th) although it came close to ending earlier since we had two 19% corrections along the way (2011, 2018).  Bulls remind us that bull markets don’t die from old age.  It’s recessions that typically do them in.  And there’s no recession in sight although many investors are on high alert.  “The next recession is the most anticipated of all time,” says noted economist Ed Yardeni, president of Yardeni Research.
 
Skeptics still claim this bull market was engineered by the Federal Reserve, fueled by QE (quantitative easing) among other factors.  But the outsized returns are real.  The S&P 500 total return (includes dividends) over this ten year period was 366.64%, or 16.65% annualized (source:   CNBC, Bloomberg).  Stocks outperformed fine art, fine wine, and even thoroughbreds.  They trounced the return on international stocks providing twice the annual gain (source:  Wall Street Journal).


  • Since we invest almost exclusively in large cap stocks, we are very interested in how they performed compared to (often riskier) small caps during the bull run.  The ten year chart below compares the Russell 1000 (large cap index) to the Russell 2000 (small cap index).  A rising line means large are outperforming small.  The chart shows that large caps and small caps take turns leading the market, but over this period performed in line with each other.  Many investors have the notion that large cap returns can’t keep up with small caps, but that simply isn’t true. 

 

  • Was last Friday’s employment report good news or bad news?  Only 20,000 jobs were added, a far cry from the 183,000 expected.  Is this a further sign of deceleration in the U.S. economy?  Maybe.  Embedded in the report was good news as well.  Wages for American workers rose nicely (fueling future consumption) and the unemployment rate dropped.  One other reason to stay optimistic:  nonfarm payroll growth has plunged to 20,000 or fewer jobs three other times since 2011, and each time the following month saw massive mean reversion, with average job gains in excess of 250,000 (source:  Drach Market Research).  In addition, the Fed is likely to stay on hold longer, maybe indefinitely (see below).
     
  • Fed Chairman Powell’s interview on 60 Minutes last Sunday was a non-event for the markets.  He stuck to the script which is a good thing for investors.  The Fed Chairman stated that U.S. economic growth will be slower this year than last, and reiterated the FOMC’s stance that it will be patient on interest rate policy.  The market is assuming a zero chance the Fed will hike rates between now and next January.  As for potential risks to the financial system, Mr. Powell mentioned cyber attacks as the number one threat.
     
  • 2020 is closer than you think.  The market will soon be paying a lot more attention to likely outcomes for the Oval Office and at the U.S. Capitol.  Current betting odds give Dems a 60% chance at winning the White House, while Republicans are at 62% to maintain the Senate and Democrats are at 70% to hold the House.
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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