As the World Turns

As the World Turns from Eric Clark In the almost 3 months since I penned my commentary on the Russian invasion of Ukraine, world and market events have continued to swirl.  Some changed, others not.  Some familiar, others not so much.  What remains prevalent, in my opinion, is a level of anxiety tied to the uncertainty all around us.  Anxiety that for some, barely registers a concern as they plow through their daily lives and activities.  But for others, a level of anxiety that might lead to an inability to act.  A preference for the status quo, and the sense of control this static state of affairs might provide.  If I’ve learned anything over the years, it’s that if you remain anchored and reluctant to embrace your surroundings, you might find yourself left behind or irrelevant in ways you could regret.  That’s not to say we should follow the herd, but sometimes it can be helpful to be mindful of the situation and reflect on how to effectively navigate.  Being mindful and reflective seem appropriate when viewing the current state Read on! →

Russians and Fed Chiefs and Covid, oh my!

Well, we have certainly turned a corner as 2021 ended and 2022 has begun. Now that we are a month into the new year, let’s take a moment to see what’s different since we left 2021 behind. One thing that hasn’t changed is that we are still dealing with Covid and most of us are weary of the restrictions. After a few months of relative freedom from Covid’s lockdown during the summer and leading up to Thanksgiving, Omicron emerged. The variant spreads easily but isn’t as debilitating as earlier variants.  This has led to fewer negative economic impacts and a view held by some that we need to begin living with future Covid variants more like a seasonal flu virus.  One sidenote for portfolios; if China sees their infection rates increase steeply with Omicron or future variants, their zero-tolerance policy may result in factory shutdowns and put further strain on the already burdened supply chain issues. 2022 brought the Federal Reserve decision-making on interest rates to the forefront, as they work to reconcile increasing inflationary pressures with their stated policy Read on! →

The View at the Top of the Year

Almost two years ago to the month, I penned a commentary on my grandmother’s quilting after what had been at the time, a seemingly volatile period in the markets that resulted in almost a 10% drop in the S&P 500 index.  The date was February 1, 2016.  Fast forward to 2018 and we are again experiencing very volatile markets with some indexes seeing corrective (10%) or bear market (20%) declines from earlier peaks.  Before revisiting that archived missive, here are some past and present figures to consider. 2018 Recap[1] In 2018, the only asset class with positive returns was Cash. All other categories were negative for the year, with the exception of fixed income, which was flat. For more details, see 12/31/18 Quilt Chart below. December was one of the worst months on record and 2018 one of the worst years in a decade. Federal Reserve (FED) raised rates 4 times and lowered expectations for real gross domestic product (GDP) growth and inflation. FED has lowered 2019 rate hike expectations from 3 in September to 2 at the December meeting. Read on! →

The View!

A recap of the week ended October 26th. One of my favorite songs growing up was Elton John’s Crocodile Rock (Side A).  Released in 1973 on a 45 rpm, it was paired with Elderberry Wine (Side B).  Crocodile Rock went to #1 while Elderberry Wine was panned by most critics, forever banished to the Side B junkyard.  Last week, every big story peaked like a #1 hit record capturing the attention of media and public alike.  Meanwhile, over on Side B,  those in the investment community who subscribe to a diversified approach to investing, probably finished the week scratched, unbroken and ready for another spin around the turntable. The A-side During the course of any given week, I try to focus on what seems most important as it relates to the work I, and everyone at Clearview Wealth Management, do for clients.  This typically means tuning in to a few key economic data points, some global geopolitical news and, as a little diversion, a few sports’ stories.  My view being, short term market and news cycles will always be with Read on! →

Tariffs, International Trade and Game Theory

  If you were in charge… If you oversaw your own country, what trade policy would you pursue?  Would you be friendly and cooperative or unfriendly and betraying?  Maximizing your country’s payoff may be more difficult than imagined.  Game theory can be used to measure success and failure.  It can also validate just how hard it can be to strike the right balance and allow both trade partners to win.   The prisoner’s dilemma… The current trade and tariff dialogue between the U.S. and China is essentially a repeated prisoner’s dilemma – a workhorse model of game theory that captures the tradeoff between mutually beneficial cooperation and individually beneficial betrayal[1]. If played once, there is only one outcome where neither side can do better with a different strategy: both sides betray one another.  While unfriendly, the mutual betrayal results in equilibrium or balance.  The shortfall of playing one time as if there is no tomorrow, is that trading partners have an infinite number of days in which to trade goods. If prisoner’s dilemma is played multiple times, even infinitely, game Read on! →