When building your portfolio and saving for retirement, hitting singles and doubles is the safer, lower-risk route. It's the singles and doubles that win the game. Home runs are exciting, but good defense and strong pitching carry teams deep into the post season.
Earnings reports include three key financial statements: the balance sheet, the income statement, and the cash flow statement. When a company announces its quarterly results, investors immediately compare the actual results to what financial industry analysts had estimated.
The strong rally over the final two months of 2023 has led to the question of whether potential 2024 price gains may have been pulled forward. To some extent, we would say yes. Stock valuations aren’t unreasonable given where interest rates are, but they are pricing in a strong probability of several interest rate cuts in 2024.
History indicates that when cardboard prices jump higher, the economy is revving up. Some analysts have said that it is too soon to tell whether price increases will persist or if they are a one-time adjustment in a retail market still reeling from the unique circumstances of the pandemic.
Charlie Munger was an inspiration to countless investors - including members of our team here at North Berkeley. His emphasis on acquiring a diverse range of mental models, understanding the fundamental nature of business, and maintaining a long-term perspective has become gospel for many in the financial world. Rest in Peace Charlie Munger.
Prices have remained relatively stable over the past few weeks, and investors are closely watching the headlines from the Fed regarding US interest rate policy as well as further developments in the Middle East.
Q3 2023 Market Commentary
With the economy remaining stronger than expected and the Fed signaling one more rate hike in 2023, investors are being forced to recalibrate their expectations for both stock and bond valuations.
While it's natural to feel uneasy when short-term risks such as wildfires or weak corporate earnings cast a shadow over the financial markets or local skylines, history reminds us that these risks will pass with time. Financial shocks are a natural part of being a long-term investor, which is why it is important to build a portfolio that prioritizes resiliency.
Like the first in a line of dominos, public investment in large-scale scientific endeavors can start a chain reaction of innovation that benefits economic growth and sustainable development in unforeseeable and beneficial ways.
Home prices have remained surprisingly resilient and have only declined incrementally from their record highs in spring 2022 despite mortgage rates having doubled over a similar timeline.
As we move into summer, we recommend ignoring the short-term noise of Fed meetings and interest rates. Opting instead to embrace new routines, longer summer days, and a break from the school year, knowing that a portfolio with a long-term strategy will remain resilient through any ups and downs.
We recognize that the debt ceiling is a negotiation, and classic public negotiation tactics should be expected. While headlines can make it tough to find reasons to be optimistic, it’s helpful to look to the historical patterns of similar negotiations to put current events into context.
It is human nature to assume the present landscape will continue unchanged. This straight-line thinking can impede our ability to make decisions about a future that is constantly in flux.
Q1 2023 Market Commentary
It is a collaboration with our clients that spans technical details, emotional needs, and the irrational and unexpected elements of life goals that makes possible the process of determining the path forward.
There are key lessons to highlight as we unravel Silicon Valley Bank's problems and subsequent relief efforts, including the importance of diversification at all levels and the speed of response to financial crises.
ESG is not a cure-all for the environmental or social challenges we collectively face. It can, however, serve as a valuable tool for investors to reduce specific portfolio risks and align their investments with a changing world.
Markets are starting this year from more reasonable valuations and with bonds yielding stronger income than prior years. This balance should benefit patient investors and diversified portfolios as they navigate short-term storms and begin rebuilding portfolio values.