Peck Bulgin Wealth Management

Our Commentary

5 Things We Are Looking At Right Now…

Written by Peck Bulgin Wealth Management

The Fed and the US Economy

“When Will The Fed Step In To Rescue Markets?”

My partners and I often like to look back at the articles and prognostications that we have read to see in hindsight just how accurate or inaccurate these pieces ended up being. Just over two months ago, I posted the following link about the so called “Powell put”, the level to which the S&P 500 would have to fall before Jay Powell would make some kind of statement to the effect of softening Fed policy. In this article, Bank of America shows the results of this question in their Fund Managers Survey. The result of their survey? A level of 2390 on the S&P 500. The interesting thing about this is that the S&P 500 reached a closing low of 2351.10 on Christmas Eve, 2018, only 38.90 points off of the survey’s prediction. Since that point, two things have happened; the Fed has softened its stance on interest rate hikes and the S&P 500 has rallied nearly 250 points. Pretty interesting…

~ Jesse A. Peck, J.D., WMS, Vice President, Investments

US Economy

“No Deal Is in Sight to Reopen the Government”

One of the many headwinds facing the markets these days has been the government shutdown. This always creates investor uncertainty as many folks don’t understand the full picture of what is happening, what is actually closed and what the underlying details of these type of events are. I came across an article a few days ago that outlines some of the finer point’s surrounding these type of political events.

~ Casey Bulgin, CFP®, CRPC®, WMS, Vice President, Investments

US Economy

“Recent Market Moves in Perspective”

Ray Dalio explains that larger economic movements are driven by all markets interacting and trying to find their equilibrium levels, in much the same way as the parts of nature interact in a never-ending process of trying to find their equilibria. Namely, Dalio focuses on the forces of productivity growth, the short-term debt cycle, and the long-term debt cycle. I like this article as it takes a big picture view in order to explain recent market conditions.

~Katharyn S. Woods, CFP®, Investment Portfolio Associate


“Something is Wrong”: Deutsch Bank Spots an Odd Market Divergence

From the time I began in this industry, over 15 years ago, it was commonplace for a conservative investor to make sure they diversified their stock holdings with bonds so it will cushion a potential slide in stocks. In fact, Harry Markowitz devised a concept called Modern Portfolio Theory. arry jkjThis was published in 1952 in the Journal of Finance and won a Nobel Prize years later in 1990. It is a theory that explains how it’s possible to develop an “optimal” investment mix between multiple asset classes depending on your comfort with various risk levels.

The issue we have seen come across our desk quite a bit is when investors choose to use stocks and bonds as the only two asset classes. We have always stressed in our conversations with clients that simply offsetting a stock allocation with a weighting to bonds will not fully do the trick. Multiple asset classes must be used to “fully” diversify for the years where simple diversification won’t work. Enter 2018. This article highlights the shortfalls of only using bonds in your investment mix as the sole cushion to a stock decline.

~Casey Bulgin, CFP®, CRPC®, WMS, Vice President, Investments

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Human Interest

“This is Water by David Foster Wallace”

A few years ago, my wife, who is much more patient than I, played the following video for me. Truthfully, I thought that it would just end up being one of the countless videos that we have all seen on the internet that are supposed to cause immediate introspection but instead just convince us that the internet is filled with pointless drivel. This video is different. The video is an abbreviated version of troubled literary genius David Foster Wallace’s 2005 Kenyon College graduation speech. That speech alone was captivating enough. When combined with a professionally produced video that does a magnificent job matching the tone and spirit of the speech, the result is incredibly powerful. Over five years after initially watching this video, I still go back and watch it from time to time. When I feel like I am missing the bigger picture or being too negative or getting too wrapped up in the day-to-day, Wallace’s speech reminds me of an incredibly powerful truth; This is Water.

~Jesse A. Peck, J.D., WMS Vice President, Investments

Any opinions are those of Casey Bulgin, Jesse Peck, Katharyn Woods and not necessarily those of Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected.