Q3 2020 Newsletter

Willis Ashby • Jul 22, 2020

To say we live in interesting times is an understatement. I would be at a loss as to where to start however I can focus on the markets and while that limits the topic it does nothing to anticipate the future. Let me start by saying I hope you had a good 4th of July. We live in an amazing country, yes, we have lots of things that need and will be to be changed and improved upon. Like Vietnam in the late 60’s change is slow and sometimes painful. We can however have the types of protests we are having and while some people may be prosecuted, we will not have beheadings, or be sending people to places like the camps in North Korea. I could go on but I have pontificated enough and can now move to the markets.

The 1st quarter as I stated in my last letter was just plain ugly, we had market drops not seen in decades. Now the 2nd quarter comes along and goes thru the roof with market rises not seen in decades. The last three months saw a rise of 21.98%. The net result is the broad Morningstar index is down -3.11% for the year. The Feds have committed to a very loose monetary policy for the foreseeable future thus supporting the markets. I think the market is looking 6 months into the future and is being optimistic about earnings and the economy in general. If we continue to have businesses reopen AND people use social distancing and are smart about mask use the market makes sense. If the virus is as unpredictable as it has been or turns more deadly, then the market is fooling itself. Time will tell and I like to be an optimist. As I wrote about last quarter and is still keeping me up is the bond side of the market. Historically we have used our bond positions to buffer the volatility of stocks and they have acted as a shock absorber of sorts. Stocks go down bonds go up and we get a smoother ride is the concept. With the 10-year US Treasury yielding .65% the historical shock absorbing effect is lost. Remember if yields go up bonds go down and if yields go down bonds go up. There is nothing left on the down side and if yields rise the “safe” US Bond looks ugly. Nick, Keith, and I will work on coming up with some clever solutions to this issue. We are sticking with our long-term investment themes; it has been a wild ride but so far it has been the right thing to do.

Some housekeeping. My hat is off to Katie who has, with not much help from the rest of the team migrated an amount of data which is incredible (the old system has well over 20 years of history). I thank her for her expertise and hard work on the conversion. While there is more to be “fixed” we can see the light at the end of the tunnel. We will be rolling out our new client portal in the next quarter and we believe you will like it. In closing I am happy to report Integra is able to weather this turmoil without any government PPP loans or other government support. There are a LOT of financial firms whose finances and balance sheets are not as strong as an investment firm should be who have needed these loans. We follow our own advice and we are better for it. We welcome our new clients and thank you so much for the trust you place with us. Stay safe and well.

Yours Truly

Willis Ashby, President

P.S., Drink Gatch Wine from Australia.

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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.