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Market Update


With the 2nd quarter now behind us, we move towards the second half of 2020 cautiously optimistic about the future of the global economy. The first two quarters of 2020 proved to be filled with unique situations. The capital markets experienced volatility last seen in the 2008/2009 financial crisis leading to 30%+ market decline in the S&P 500. Meanwhile the second quarter market rally recuperated much of those losses leaving the S&P 500 trading at a year-to-date loss of approximately 3% as of the time of this email. Recent economic information remains positive, while the health care crisis remains uncertain and concerning.

Important takeaways from the recent market events:

  • The market continues to be forward looking. Despite record unemployment figures, a meaningful decline in corporate profits, and uncertainty in the future of "Post COVID-19", investors expect things to be better in the future than today. Economic support for the government and federal reserve have supported the economy and allowed for households to remain relatively confident. There is reason to believe global governments will continue to support economic activity through low interest rates, accommodating monetary and fiscal policies, as well as creative solutions to influence capital markets.

  • Timing the market is impossible and creates risk of missing opportunities. Sticking to a long-term diversified portfolio that aligns with your long-term risk tolerance is key to meeting your objectives.

  • Rebalancing is critical to a long-term investment strategy - As you may recall, we discussed portfolio rebalancing in late March. At that time, stocks experienced a deep correction while bonds appreciated significantly. This presented an opportunity to rebalance to targets, "buy low and sell high".

Things to consider as we go forward:

  • In the same way we encourage clients to remain calm in down markets, we recommend you remain cautious in market rallies. Those that stuck to their strategy have recovered much of their losses.

  • Reconfirm your risk tolerance - If you felt the need to change your strategy during the market decline or rally, now is a great time to revisit your long-term plan. With markets trading well above their 2020 lows it may be a good time to confirm your risk tolerance and revisit your financial plan. If you'd like to revisit your risk tolerance, please let us know.

  • The markets and economy are fragile. Unexpected events and information could push markets lower once again.

  • We are reviewing portfolios for rebalancing. Given the market rally, portfolios are nearing another rebalance by "selling stocks and buying bonds". If we continue to see equity prices increase, you may see modest rebalance trades.

We look forward to continuing to serve you in the future. If you have any questions please let us know. And if you have any friends or family members that could benefit from our services, please share our contact information. We rely on referrals to grow our business and there is no better compliment from a client than a referral.

If you'd like to schedule a review call/meeting, just click here and you can directly access our calendar to schedule a time. If you don't find a time that works, let us know, and we can rearrange our schedules.

 
 
 

TruNorth Capital Management L.L.C. (TruNorth Capital) is a fee-only Registered Investment Adviser (RIA) registered with, and regulated by, the United States Securities and Exchange Commission (SEC). TruNorth Capital is limited to providing advisory services to residents of Michigan, Missouri, Washington, and other states where TruNorth Capital is notice filed or is exempt from notice filing. Most but not all states permit a RIA to have a minimum number of clients before notice filing is required, providing the RIA has no physical presence in the non-resident state.  All clients and potential clients have access to important information about our business methods, fees, professional qualifications and all other pertinent business information. By using this website, you accept our Terms of Use and Privacy Policy. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in loss.

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Regarding the interaction TruNorth Capital or its representatives may have with clients and/or potential clients in ERISA-covered plans, including SEPs, SIMPLEs and non-ERISA retirement plans that are subject to Section 4975 of the IRS Code, including IRAs, Keogh plans and Solo 401(k)s (collectively "retirement plans"), TruNorth Capital may provide non-discretionary investment advice to a specific investor, recommending or suggesting the acquisition or disposing of securities or other investment property in a retirement plan and/or recommending a rollover from a retirement plan to another. During the course of this interaction, TruNorth Capital meets their requirements of a "level-fee fiduciary" and adheres to the Impartial Conduct Standards that require TruNorth Capital to a) provide advice that is in the client's best interest, b) receive only reasonable compensation for its advice and; c) not make materially misleading statements. 

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