Approximately a year ago, a couple had their first meeting with us here at White Raven Financial – they were here to interview us as potential partners for investing in their future. What was memorable about our initial meeting was not their questions, nor their goals, but the gentleman’s feet. There on his sandal clad feet were 10 toes sticking out decorated with shiny, bright, and colorful deep pink nails. After the usual introduction and discussion of values, Diane could no longer hold her curiosity and finally said “I can’t help noticing your nail polish, are you celebrating something special?”. The man, with a beam of pride on his face, said “this happens almost every summer, it is a tradition”. He then went on to explain that when his daughter was little, she asked if she could paint his toenails. Being the dad that he is – not a problem. The daughter is now a teenager, but the tradition continues. Who would want to give up such a special father and daughter bonding moment?
Here at the office, we try to construct our portfolios to fit within each person’s unique goals and values. A reminder that not everyone fits the same profile, has the exact same values, same timeline, and same risk tolerance as others. And, we feel proud to call ourselves fiduciaries; to employ the portfolio with our client’s best interest front and center. We also wear our masks if we cannot socially distance. We really appreciate all the men (and women) that have visited our office and have come with their masks on their face as well. Our take on it: It takes a real man to wear pink nail polish and it takes a real man/woman to wear a face mask!
Domestically our economy showed uniqueness: The markets reached record highs even though we are in the midst of a global pandemic and there remains record unemployment here in the U.S. Adding to the news, we learned that the U.S. posted an historic slump in the 2nd quarter with the gradual re-opening of stores happening much slowly than we hoped. William Madden of Russell Investments, in his mid-August blog, wrote about the disconnect between the market and the economy. It appears, he wrote, that though-out our history there have been several recessions with positive stock returns – that the stock market’s peaks and troughs are often independent of the economy during a recession. And even though the U.S. has been experiencing a slowdown, Bill Smead, of Smead Capital Management, indicates that inflation may be added to the cocktail mix of today’s environment. Almost all the above authors noted that one could expect some market volatility in these uncertain times and that we may experience periodic downturns on the way to recovery. Ah, a reminder to stay the course within one’s risk tolerance.
And while the U.S. appeared to open their economy quicker than their international counter-parts, Blackrock’s Michael Lane – Head of iShares U.S. Wealth Advisory – reminds us about the changing global economy; that both innovation and accelerating trends are also occurring outside of the U.S. In a mid-August Schwab Market Perspective, the team of Lis Ann Sonders, Jeffrey Kleintop, and Kathy Jones, wrote about diverging recoveries in several global economies. They commented that a stronger rebound may occur in Europe and Asia than in the Americas due to the stringency measures in those economies. As we noted, there is much speculation on a vaccine, and much is dependent on the ‘if’ and the ‘when’.
And, just in case you did not hear, the Olympic Games were moved out by one year. Of course, through email, we learned of an Olympic fireworks set off under beautiful Mount Fuji to celebrate what was to be the initial start date. Even though we found out it was a simulation, we still found it entertaining. Sometimes even fake news can be fun.
The markets in August celebrated summer with cheer. The blue-chip barometer (the Dow)* popped the cork and brought in a gain of 7.57%. The S&P 500 (SPY)* provided a bit of effervescence showing a 7.01% gain for the month of August. The tech-rich Nasdaq Composite (COMPTR)* bubbled over on a 9.59% rise for the month. (*After linking, click on Quarterly & Monthly Total Returns, “Monthly” tab.) On Tuesday, August 25th, the Dow Jones Indices released the latest S&P CoreLogic Case-Shiller report. The report noted that home prices had changed slightly from the previous month. The 20-city composite Home Price Index in June reported a 3.5% annual gain; down 0.1% from the previous month year-over-year posting. Before seasonal adjustments, month-over-month data had the month of June showing a 0.2% increase over the prior month of May for the 20-city composite index.
Regards and thank you (as always) for reading,
The Team at White Raven Financial
Advisory services offered through White Raven Financial Services, Inc. a Registered Investment Advisor in the State of Washington.
*Indexes are unmanaged and do not reflect service fees, commissions, or taxes. You cannot invest directly in an index. Past performance is not necessarily indicative of future results. Returns for the DOW, S&P 500 and the NASDAQ are the total return (price only) provided by Morningstar as of August 31, 2020. Diversification and asset allocation do not assure or guarantee better performance and cannot eliminate the risk of investment loss.
*The Standard and Poor’s 500 is an unmanaged, capitalization weighted benchmark that tracks broad-based changes in the U.S. stock market. This index of 500 common stocks is comprised of 400 industrial, 20 transportation, 40 utility, and 40 financial companies representing major U.S. industry sectors. The index is calculated on a total return basis with dividends reinvested and is not available for direct investment.
*The Dow Jones Industrial Average covers 30 blue chip U.S. companies selected by the editors of the Wall Street Journal. The Dow represents about 25% of the NYSE market capitalization and less than 2% of NYSE issues.
*The NASDAQ is a market-value weighted index that measures all NASDAQ domestic and foreign common stocks.
