“Ruff & Reddy” and “Hotel California” – Nvest Nsights Q2 Newsletter

On June 30, the S&P500 enjoyed its 34th new closing high of the year, and is now up roughly 95% from its March 2020 low.  Remarkable!  Our first article, “Ruff & Reddy” reviews the catalysts behind this powerful advance, but also that under the surface there is rotation underway and broader market momentum is softening.  This is normal in the second year of a new bull market and is often accompanied by more volatility.  Government remains a key factor for the prospect of volatility as well.  In that regard, the lyrics of the 1976 Eagles song “Hotel California” may be a good summary of the challenge government may face when they at some point attempt to walk-back from deficit spending or target inflation.  In a different way, the song’s lyrics may be spun toward appropriate guidance for individual investors too.

The personal finance article this quarter, “Is Your Beachbody Ready for Summer?“, shares a client’s motivation to participate in a recent stock IPO.  We are often asked by clients about various investment ideas – ranging from ‘meme-stocks’, bitcoin, or real estate; this client’s thoughtful approach to an investment receiving lots of buzz provided a refreshing and textbook example of how to avoid potentially unhealthy financial behavior.

A printer-friendly version of our quarterly newsletter can be obtained here: Q2 Nvest Nsights

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Is Your BeachBody Ready for Summer?

Meme stocks, Real-Estate, Initial Public Offering (IPOs), Special Purpose Acquisition Company (SPACs), Bitcoin, and Precious Metals – what do all of these share in common? Each is an example of an investment or asset currently receiving lots of “buzz” and client curiosity. While we do not typically follow these items intimately and prefer the diversification and liquidity of traditional mutual funds, bonds, and ETFs, we do not necessarily have anything against a client owning other assets when the exposure is properly managed. We do encourage anyone exploring ideas that are receiving intense attention from the media or “peers” to proceed with caution as the waters are often dangerous. If we were lifeguards at the beach, we would hang the yellow flag on the chair, “proceed with caution.”

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