Q1 2021 Newsletter

Willis Ashby • Jan 15, 2021

Integra Financial, Inc. 1/4/2021

Welcome to a new year and let’s hope it is brighter than 2020. The pandemic is and will be with us for a while longer, however the promise of several vaccines lets us see the light at the end of the tunnel. Social unrest, the election, the drop in oil prices, and finally, a new variant of the virus threatening another shutdown of the economy are all affecting our markets. Still, despite all this, we finished the year with the Morningstar broad index up an amazing 20.90%. Growth stocks have been outperforming value stocks for a while and it has been frustrating to see the lag in the value sector. Last quarter started to correct the differences. The Value sector was up 17.29% with Small Value up a whopping 33.42%, Mid Value up 20.32%, and Large Value up 14.62%. It is a good lesson on staying with your plan. The temptation to sell was strong but well worth ignoring. The Federal Reserve is continuing to flood the market with liquidity and the newly passed stimulus bill is very helpful. We will wait to see what future problems may come from it, although debt and inflation are two. I think the vaccine combined with the new stimulus is driving the market to its new highs. I have written about volatility and it includes both the up and down. “In the short run the market is a voting machine, but in the long term it is a “weighing machine,” said Benjamin Graham, the father of value investing. We will invest and continue to focus on company profitability.

I have written before about blockchain technology and the currencies using it- Bitcoin etc.- and I confess I still do not fully understand the effects they are bringing. However, I remember a speech by Bill Gates several years before email existed saying that the “Internet” is going to change our lives. I could not then understand how. As I stated, I do not fully understand Blockchain technology now, however, I can say its impact is going to be big! It is now being called the Internet 3.0. I think it is well worth watching and as we find investing opportunities (we understand), we will bring them to our portfolios. It will be exciting. I recommend watching the Prime video “Cryptopia: Bitcoin, Blockchains, and the Future of the Internet”; the trailer can be found here: https://vimeo.com/440636858. I am also reading a very interesting book “Economic Facts and Fallacies” by Thomas Sowell. It is thought-provoking and I recommend it as well.

In closing, please remember to let us know of any changes in your financial situation so we can adjust your portfolio to match your new situation. Nick, Keith, and I thank you for the trust you have in us. Please contact us with concerns you might have. We hope you like the healthy food we sent, enjoy.

Yours Truly;

Willis Ashby, President

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Newsletter Sources

Morningstar | WSJ | Money & Wealth | TD Economics | Westbury 101

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2Q 2024 Newsletter

By Willis Ashby • 08 Apr, 2024

As usual I hope this finds you well. As we welcome spring and having just finished the first quarter, things look good. The broad Morningstar index was up 10.24% through 03-31-24. The large cap companies led the way up 11.08% and the small caps up 5.69%. The S&P 500 experienced 22 “all-time highs” with less than 2% drops in-between. Amazing!

1Q 2024 Newsletter

By Willis Ashby • 11 Jan, 2024

I hope you had a safe and enjoyable holiday season. For the first time since COVID we were able to have our entire family together, including the Australians, it was very nice. I hope yours was as enjoyable. The top news stories of the year were the rapid rise of interest rates effectively slowing inflation without crashing the economy:

4Q Newsletter

By Willis Ashby • 05 Oct, 2023

After the bruising market in 2022 where the broad index was down 19.43%, we are in a better place. Year to date the Morningstar broad index is up 12.81% but down 3.19% for the quarter. That said, we have a lot to keep our eyes on. On the positive side, consumer spending is remaining robust, and the Biden administration passed their TRILLION-dollar spending bill, corporate profits are slowing but still positive, unemployment is a low 3.6% and the Fed again passed on raising interest rates.

Distribution Options for Inheriting Retirement or IRA Proceeds (Beginning in 2020)

By Keith Fevurly • 19 Sep, 2023

Distribution Options...

To Roll or Not to Roll (Rollover IRAs)

By Keith Fevurly • 24 Jul, 2023

Some points to consider: 1) Likely the biggest distribution question that a 401(k) participant asks is: should I rollover the proceeds to an IRA or retain it within the 401(k), assuming the plan sponsor allows that? There is no certain answer to this question, although in the majority of situations, it is preferable to roll the proceeds because of participant control of the account. See Willis, Nick, or Keith to begin the paperwork for a Rollover IRA.

Q3 2023 Newsletter

By Willis Ashby • 10 Jul, 2023

I hope you had a wonderful 4th of July celebration. We have a reading of the Declaration at our gatherings, it is always amazing to me to hear how many people under 30 saying they didn’t understand what was declared and to whom it was sent. After the declaration we (our founders) wrote our Constitution taking the best from the Magna Carta of 1215 and the English Parliament’s Bill of Rights of 1689. We have a lot of issues in our country but when you look at our beginning, it is amazing!

Q2 2023 Newsletter

By Willis Ashby • 13 Apr, 2023

You cannot say we do not live in interesting times; A past president indicted on criminal charges; bank failures; FTX collapse; and high inflation to mention a few. The Morningstar broad index was up 7.40% for the quarter and YTD. Most of this was the rebounding of the large tech companies which had been crushed at the end of last year.

Q1 2023 Newsletter

By Willis Ashby • 30 Dec, 2022

First Happy New Year. I hope you and your families had a pleasant, safe, and healthy start to the year. There are so many things causing headline news and affecting the market: COVID, “Transitory Inflation”, Ukraine, another $1.7 trillion spending bill, FTX’s downfall, snowstorms, Trumps Tax Returns, Fentanyl and the border. It is no wonder we are having a rough market! The S&P was down 19.4% in 2022, the worst since 2008. I think the three things that are most affecting the market are:1) the COVID shutdowns,2) massive government spending, and 3) inflation. The shutdown of an enormous part of our economy during the pandemic, in hindsight, was a mistake.

Q4 2022 Newsletter

By Willis Ashby • 05 Oct, 2022

This is not a pretty quarter or year for the markets. The broad Morningstar index is -4.58% for the quarter and- 24.88% for the year. As I noted a few quarters ago the large-cap growth stocks make up the largest part of the index, so when they go up or down the entire market feels it. The Large Cap Growth section of the market is -40.99%, (Time to buy?). We also know on average every 5 years the stock market loses money. It is the price we have to pay for “investing” and receiving better investment results in the long term. It is interesting to note that with few exceptions there have been no safe harbors. Cash -8%, Gold -8%, Bitcoin -70%, Bonds -15% (depends on the class and type Muni vs Corp vs Govt), so if you wanted to go into the currency market and made a “bet” on the US Dollar rising, you would be very happy; too risky for me. As a reminder, when interest rates go up bonds go down, but the usual result of “stocks go down bonds must rise” is not occurring. This is the time to reflect on how much our accounts have gone up in the last few years and to realize it will do so again. It is just a matter of time! Apple, Google, and Procter & Gamble are not going anywhere, just because the market thinks they are a LOT less than last year really means they were overpriced then and now they are likely underpriced. The S&P earnings are at 8% so why are the markets down? If you strip out energy the number drops to 1% and the market thinks inflation is going to take it away: -no earnings and you get a down market! As much as I do not want to admit it, I agree. We don’t know if wages drive prices or vice versa, but we do know inflation is caused by too much money circulating in the economy. The Federal Balance Sheet in 2007 was $850 Billion, today it is close to $9 trillion. We cannot continue printing and sending out trillions of dollars. The Federal Reserve has said it will continue to raise interest rates until inflation is under control. The economy will likely take a hit but sit tight since it will recover. As a reminder, the market went up 9% in July alone. If you are worried about the markets give us a call, we have been through this before.