Feb 2025 Market Commentary – Press Pause

Press Pause | Steve Henderly, CFA

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Life seems to move at such a fast pace!  Wouldn’t it be great if there was a button to just stop everything for a moment or two?  The ability to pause was first invented in the 1960s for reel-to-reel tape decks, but it wasn’t until the advent of VCRs and DVRs when consumers became more familiar with it.

“Press Pause” seems a fitting theme for January from multiple perspectives.  The Fed paused it’s recent interest rate cutting campaign and Mag-7 ascent paused following Chinese competition emergence in the red-hot Artificial Intelligence space.  The news cycle was also dizzying, including the inauguration of a new President and a whirlwind of executive orders affecting various policies.  Tariffs, although widely anticipated with the new administration, became reality at month-end and introduce one more uncertainty as we enter February (tariffs on both Canada and Mexico were unveiled, but quickly paused as well – more on that topic later).

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2024 Q4 Nvest Nsights Newsletter

Printer Friendly PDF: 2024 Q4 Nvest Nsights Newsletter which also includes benchmarking and data on investments widely utilized in our current tactical strategies.

2024 Year in Review | Steve Henderly, CFA

There was no Santa Claus rally to conclude 2024. In fact, away from the largest technology names which permitted indexes like the size-weighted S&P500 to move upward, the average stock received a few lumps of coal in December.  But even without a year-end rally, 2024 exceeded the expectations of most investors.

Twelve months ago, the S&P500 stood at a level of 4,770 and the average strategist’s target for 2024 was an advance of just 2%.  A variety of concerns led the consensus to project a relatively mild return in the stock market as we entered 2024.  Along with inflation and interest rate uncertainty, 40% of voters around the globe would choose new leadership; the most in history.  Talk about uncertainty!    Despite these concerns, the S&P500 leapt roughly 24% and logged 57 record highs to close at a level just shy of 6,000.  How can the consensus so often miss the mark?

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Dec 2024 Monthly Commentary – Comedian

 “Comedian”  | Steve Henderly, CFA | Nvest Wealth Strategies®

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Original work by artist Maurizio Cattelan. Image is a screen shot from Wikipedia, and used for illustrative purposes only to provide context about the work which sold at recent art auction.

What are some of the most famous works of art that come to mind? The Mona Lisa, Van Gogh’s Starry Night, or perhaps a masterpiece by Picasso or Monet? We often hear of art fetching astronomical sums at auction.  Yet the question of what constitutes “art” or how the monetary value is derived can be a topic of fierce debate.  While value of art may be in the eye of the beholder, most people would not consider a banana duct-taped to a wall as art. The art world was recently stunned when such a piece, aptly named “Comedian”, sold for an eye-watering $6.2 million – accompanied by a certificate of authenticity and instructions for display. In a world where absurdities abound (Bitcoin trading near $100,000 comes to mind), one might wonder: can we really claim monetary policy is too tight when such frivolities command such staggering sums? Does the Fed truly need to consider further rate cuts, or would a pause be more appropriate?

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Nov 2024 Monthly Commentary – One and Done?

One and Done? | Steve Henderly, CFA | Nvest Wealth Strategies®

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Twenty years ago, an influx of dominant high school basketball players caused controversy among the NBA and its players union, and in 2005 the “one-and-done” rule was implemented.  The rule stipulated players coming out of high school must spend at last one year at the collegiate level or alternate organization to better prepare for the physical and mental demands of the NBA.  While “one-and-done” is generally associated with athletes fixated on going pro, a dramatic reversal higher in interest rates last month leaves some already questioning whether the Fed’s recent pivot to rate cuts will be “one-and-done” after the FOMC meeting this week.

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2024 Q3 Nvest Nsights Newsletter

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Turbulent Ascent Continues | Steve Henderly, CFA

Despite a bumpy journey, investors experienced attractive growth during the 3Q with the S&P 500 rising by 5.9% to reach a new all-time high.  Client portfolios benefited strongly with both stocks and bonds enjoying price appreciation.  This coincided with the Federal Reserve implementing its first rate cut after a year-long pause.Continue reading

Sept 2024 Commentary – Air Pockets

Air Pockets | Steve Henderly, CFA | Nvest Wealth Strategies®

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One of the biggest thrills for roller coaster aficionados is the sensation of free-fall in their stomach as the train makes its way over the edge of the first drop.  Perhaps you’ve experienced a similar sensation during a flight where there was turbulence or an air pocket.  If it was unexpected, it probably caused brief anxiety.  Earlier this year, a flight from London to Singapore was going smoothly until the plane experienced a sudden and dramatic change in altitude, dropping nearly 200 feet in less than 5 seconds.  Panic probably best describes what passengers felt.  A drop like that can throw anyone not securely in a seat belt into the  ceiling and then quickly crash back down; more than half of the flight’s passengers required medical treatment as a result of this unexpected air pocket.

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Aug 2024 Commentary – Signs of Life

Signs of Life | Steve Henderly, CFA | Nvest Wealth Strategies®

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Ever feel confused by highway signs?  “Slow Children at Play”, or “Caution Pedestrians Slippery When Wet.”  A traffic sign in England says, “Right Lane Must Turn Left.”  Or how about “Entrance Only.  Do Not Enter”.  And if you see a large sign announcing, “Welcome to Accident,” you’re probably entering the town of Accident, Maryland.  I’m sure you can think of similar perplexing signs in your travels.  The world is giving us a lot of confusing signs right now, and sometimes we hardly know where we’re headed or what we’re doing.  The same is often true with investing; for example, good economic news is sometimes viewed as bad by the markets.  Or in the case of the last several years when inflation was running too hot, weak economic news is often viewed favorably.

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2024 Q2 Nvest Nsights Newsletter

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Game Point! | Steve Henderly, CFA

Tennis great Roger Federer won nearly 80% of the 1,526 singles matches he played over his career.  Yet you might be surprised to learn that he won just 54% of the points in those matches!  Even top-ranked tennis players win barely half of the points they play… which also means they lose almost half of the points they play.  Interesting.  In Charles Ellis’ book, the “Loser’s Game”, stock market investing is likened to the game of tennis.  In that book, he explains that success is determined by avoiding big mistakes and keeping the ball in play rather than by attempting aggressive hits.  We can’t help but feel the analogy aptly applies to the deceptive allure of the S&P 500’s performance YTD – where performance is being driven by the spectacular gains of a few mega-sized tech companies.

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