“Mr. Kadiddledopper, He’s Confusing” – February Commentary

Do you know, or ever meet, a Mr. Kadiddledopper?  If so, you’d surely remember.  He is a man of opposites.  Kadiddledopper is a guy who lives in a small town, whose house looks badly in need of painting; yard needs mowing; landscaping is overgrown with tall weeds woven in; and a broken picket fence with peeling paint.  Even his clothing announces a reclusive personality.  The town folk don’t know how to relate to him.  Mr. Kadiddledopper speaks in opposites.  Understanding his talk is challenging and confusing.  “Bye. Sure is cold today,” he says when greeting you on a humid 90 degree day.  Caution when following his directions – turn left when he says go right; stop means go, and go means stop; up-town means down-town.  When he answers “no,” he really means yes, but a most peculiar exception is “Yes” always means yes.  Is there such a real-life person?  Not sure; I created my fictious guy for humorous “fun” with young grandkids.  Ever struggle with a toddler who says “no” to everything?  Try instructing them that “no” means “yes,” and “yes means “yes.”  You may still be frustrated and certain that opposites don’t work.  “Don’t try it” with your spouse, and definitely not in public!  You will discover it’s easy at first and gets harder with practice.  [Italics will denote opposites to avoid confusion.]

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“The Upside to Rate Hikes” and SECURE Act 2.0

As shared throughout 2022, the Fed’s battle with inflation is the dominant force driving challenges in both the stock and bond markets.  In addition to a challenging market, borrowers are feeling pain in the form of higher rates on mortgages, credit cards, auto loans, etc.  These are the painful realities of reversing the Fed’s previous interest rate (ie. free money) and quantitative easing (QE) policies.

There is an attractive positive to higher interest rates however.  For savers, cash is finally returning a “reasonable” rate… if you know where to look! Continue reading

“Horsefeathers! #$*^” – December Market Commentary

Ever hear someone say “horsefeathers”?  It’s peculiar, so when it’s exclaimed a puzzled look often occurs.  “Horsefeathers” is politely spoken when something did not go right – like I made a bad pickleball shot or missed an easy putt; or a goofy mistake occurred that could be anticipated.  It’s amusing that I used this word for years and decades. As I considered using “horsefeathers” for the title of this commentary, I’m taken back by its age and origin – originating from the 1900s.  It was used in several film gags from the Marx Brothers’ (Groucho, Zeppo, Harpo, and Chico) in “Fun in Hi Skule” (1932).  “Horsefeathers” is slang for nonsense, foolishness, rubbish; indicates disbelief; like “Oh, that’s just horsefeathers, and you know it.”    Sometime in the future maybe I’ll share about Mr. Kadiddledopper, or the idea of “enjoying your snooze cruiser.”  [NOT, you may develop thoughts that I’m crazy.]

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“Three-in-One” – November Market Commentary

Three-In-One: This commentary shares three shorter writings about the changing investment landscape.  We hope presenting these ideas is helpful; we share our “radar screen” as we navigate these perplexing times. – Bill Henderly, CFA, Nvest Wealth Strategies, Inc.

Price & Time

October financial market performance is often thought to be scary.  That’s because some of the worst historical drawdowns occurred in October – 1929 and 1987.  Interestingly a number of past bear markets also “died” in October of which several were also midterm election years.  Did you know, that September is more often a negative experience?  October 2022 represents the single best performance month this year for stocks and client portfolios.  It provides at least momentary respite from an otherwise trying YTD.  The financial market system may be “voting” on several changing tidbits – inflation may be peak which some think should lead to a Federal Reserve pivot or pause (but that seems unlikely before 2023); company earnings are softer but better than expected; and upcoming mid-term elections may produce Washington gridlock, a condition markets generally prefer.  The S&P500 advanced +8.1% during the month which generated positive client portfolio returns as well.  YTD returns are still decidedly negative but improved from their quarter-end market lows.

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Special Market Update – “Financial Market Elevators”

On April 27 we shared a Special Market Alert entitled “Escalators, Not Elevators”.  Why does investing in the stock market, also add the bond market this year, feel like taking an escalator up, and riding an elevator down?  Rising markets seem to be slow upward climbs, like an escalator; the rise occurs over extended time (months and years).  But a correction or bear market, defined as a decline of -20% or more, occurs quickly (days and weeks, or months), like riding an elevator down.  It seems to take a year to earn 10% in a rising market, but a few days to lose 10%.  The elevator experience is always uncomfortable and creates anxiety.  Yes, anxiety for us too as we manage client accounts with great care and effort.

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Behind in the Count – September Commentary

Challenges exist for anyone playing sports when they are “behind in the count.” It’s a common experience for all athletes. Pressure builds for example, when batting with a count of “no balls and two strikes”, or behind in the football score 21-0. No competitor likes being behind, and extra effort may be pursued to bring about a positive winning outcome. Competitors strive for opportunity to succeed. Isn’t that the way with most things in life – pursue success, not failure?!

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Navigating – August Commentary

GPS (Global Positioning Systems) offers us so much information about our surroundings and position in our world.  On a recent vacation, we used the Navigate button in our Tesla to direct us efficiently to charging stations to help us reach our goal, home.  The system calculated, like an aeronautical map used in aviation, our route with points of interest, neighborhoods, and terrain.  It took a few moments as it planned our route to avoid heavy traffic, road construction, and other hazards attempting to ensure the car would have ample charge to reach the next point – charging stations and ultimately home.  As we set off, the little red chevron that represented our car began following the planned route inching from right to left across our screen traveling west, north-west.  The map was laid out in the standard position with North locked at the top.  Our little chevron traversed across the fixed screen.   I’m not fond of that traveling presentation.  So, I pressed an icon on the top of the screen and suddenly our little chevron was fixed in the center pointing up (forward) as the map turned and moved under it!  [Being simple minded, I prefer the chevron pointing the same direction as the car is traveling.]  Which way was north, south, east west?  Did I care?  Cities, roads, and the world revolved around me!  My real concern was that we were generally traveling west, north-west toward our goal, home.

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Special Market Update – “Market Sentiment = Inflation Stress”

“Sentiment” means an attitude, thought, or judgment prompted by feeling; a refined feeling.

Late last week market sentiment quickly soured, like moving from spring to summer in just a few days; sentiment is very concerned about INFLATION and its influence on the future domestic and global economic path.  It’s not about economic strength – strong consumer spending, or company sales/earnings – it’s all about how the Fed and other global central bankers will be “attacking” stressful inflation.  2022 is the year of rates – inflation and interest rates (the Fed just raised rates another 0.75% – the biggest hike in a single move since 1994).  Inflation is creating demand destruction.  Inflation diverts where consumers would otherwise spend.  That growing concern is causing investors to rethink their attitude toward stocks and bonds.  After approaching these levels in late-May, the stock market officially entered a bear market down -20% on Monday (June 13) following  a short-lived bull market which ran just 22 months (from 3/23/2020 and ending on 1/3/2022).

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Bowling Bumpers – June Commentary

Chloe and Miles grew up between the same bowling bumpers that encouraged risks, inflated confidence, and prevented consequences.”  The quote is from “Rock the Boat” by Beck Dorey-Stein.   Ever bowled where bumpers are placed in the gutters on each side of the lane?  Rolling a gutter ball is not possible.  This makes bowling fun for young kids and new bowlers.  But, this concept is dangerous in real life – putting up “fake” guardrails to prevent bad outcomes; then when the trouble occurs, extending “forgiveness” without consequences.  The same concept can occur in life when we are allowed to enjoy our “kicks.” But when the “bumpers” are removed, unwelcome “kickbacks” can occur.  When my boys were growing up they were cautioned, “You can choose your kicks, but you cannot choose your kickbacks.”

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