Sometimes it is hard to find glimmers of hope in the midst of a bear market.  Maybe last Thursday’s 1200 point surge in the Dow was an indication the worst is over.  Time will tell.

Seasonals, however, are very bullish right now.  Here is what we mean:  First, November and December have historically been two of the best months of the calendar year for equity markets.  Second, we are entering the six month window from November through April that has absolutely trounced the six month window from May through October.  Since 1928, the cumulative change of the S&P 500 (not total return) during the November-April window has been +5,145%, while the cumulative change during May-October has been just +277%.

We are also entering the best period of the four-year Presidential Election Cycle (see below).  The middle part of year two of the Election Cycle has historically seen the worst performance, but the last two months of year two and the first half of year three have typically seen a big upside move. 

Source: Bespoke Investment Group

Will these bullish seasonal factors outweigh fundamental factors that remain negative.  Probably not.  But current market factors are not one-sided.  There are glimmers of hope for the bulls, including seasonals.

When Fed Chair Powell hiked rates by 75 basis points for the fourth consecutive meeting earlier this month, he took the Fed Funds rate up to 3.75-4.00%. That left the Fed Funds rate just a hair below the yield on the 10-year Treasury note.  Historically, the Fed has been at or close to the end of its tightening cycle once the Fed Funds rate gets up to the level of the 10-year Treasury note yield.

The end of the monetary tightening cycle is exactly what stock investors are looking for and any sign of that will likely spark a rally, perhaps a sustainable rally.  When the October CPI was released last Thursday, investors took the favorable report as a sign the Fed may slow future rate hikes and may even “pivot” early next year.  A 1200 point rally in the Dow ensued.  We think it is premature to expect a near-term pivot by the Fed, but a string of better inflation numbers and a weakening economy may force the Fed to stop tightening in order to prevent a hard landing (recession).

AVOID THE CRYPTO INDUSTRY

Last week Binance, the world’s largest crypto exchange by volume, signed a letter of intent to buy troubled FTX, the third largest crypto exchange.  Just a bit over 24 hours later, the plan crumbled.  Binance backed out after reviewing the company’s structure and books.  Reasons given were news reports about mishandled customer funds (potential fraud) and alleged U.S. Agency investigations.

This is another black eye in the world of crypto.  Regulators are now under far more pressure to ramp up supervision of an industry that has so far thrived on opacity and a lack of clear rules.  The crypto industry is still the Wild West.

Crypto markets have lost some $2 trillion in market value over the last year, including Bitcoin which is 75% off its high from a year ago.  All of this is a lesson for crypto investors and the Fed, which encouraged excessive risk-taking by keeping real interest rates below zero for so long.  The crypto markets may be capitalism, but it is a speculative form of it. 

We continue to advise our clients against making any investments in the crypto space.  This is not a place for serious investors, especially those retired or planning for retirement.

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.

Get Started

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.

View full bio

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.

View full bio

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.

Recent Commentaries

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

January 2025 Market Commentary

The S&P 500 has had a 20%+ return for two years in a row. It has only rallied 20%+ in back-to-back years three...

November 2024 Market Commentary

With an YTD gain of 22.1% through yesterday, the S&P 500 is on pace for its second annual 20% gain in a row. Surprisingly, that has only happened two other times:  first, three times in a row from 1954-56, and second, four years in a row from 1995-98.  However,...

October 2024 Market Commentary

China may be our biggest adversary, but the health of their economy and markets are important to the U.S. They are a major trading partner and their markets contribute to overall global stability. Chinese policymakers are finally alarmed enough to shift out of low...

September 2024 Market Commentary

August was a roller coaster for stocks. Moves lower in a roller coaster market can be terrifying, and in the first three trading days of August, investors had to contend with economic data showing what looked like a sharply decelerating economy and the unwind of the...

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

INVESTORS BALANCE SHEET – PROS AND CONS Here are a few of the pros and cons investors should consider when forming an opinion of the stock market.  It is always important for investors to look at both sides of the argument even if they feel strongly in one direction,...

As a current or near term retiree you have real concerns…

We provide dedicated solutions
Contact Us