July 2024 Newsletter
Portfolio talk:
The economy and markets are still consumer driven and are still stable. Anticipating a Federal Reserve rate cut with little chance of rate increase, we have likely pivoted to a longer-term view, a more normal marketplace. “It’s time for a durable portfolio rather than walking on eggshells after pandemic, supply chain disruptions, etc, etc.”
The Federal Reserve still targets 2% inflation with current rates drifting down: April 3.6%, May 3.4%, June 3.3%.
Why is my portfolio lagging? Portfolio realities:
- S&P 500 (500 biggest companies by value) has performed +14.6 per June 25 above.
- The top 10 stocks account for 70% of the return and they are as follows:
NVIDIA, Microsoft, Alphabet (Google), Meta (Facebook), Amazon, Eli Lilly, Apple, Broadcom, Berkshire Hathaway and JPMorgan Chase.
Exclude the top 10 stocks and the S&P 500 return drops to 4.53%. - The Dow Jones Industrial (32 companies representing core sectors) was +3.77%
- The Russell 2000 (the broader market) is -.23%. It’s flat.
- Bloomberg Value index was -.23%. It’s flat.
- S&P High Dividend Index was +4.55%.
Where inflation lurks:
Car insurance is one of the highest inflation contributor at +23%. Before you blast your insurance agent, know that insurance companies must justify the increase to state regulators. Interestingly, post-covid sees higher accident rates. The cost of business is more expensive. Labor costs have increased within companies and the contractors they use. Parts are increasingly expensive. Fewer parts are formed metal. More parts are plastic with electronic sensors.
Homeowners insurance costs have been skyrocketing since 2023, an average of 23% across the country with some states as high as 60%. Climate change and weather risks stress companies who pay claims for extreme storms. More storms are expected. Labor and materials are more expensive.
AssetMark clients received notice of AssetMark change of ownership. Platform provider AssetMark is being acquired by the private equity firm GTCR of Chicago for $2.7 billion, the two firms said Thursday (April 25, 2024 ThinkAdvisor.com.) The deal comes seven and a half years after China-based Huatai Securities bought a majority stake in AssetMark for $768 million. (KR: Note the good return on investment!!) “This transaction is a testament to the support and commitment of Huatai …, and the hard work of the entire AssetMark team,” AssetMark CEO Michael Kim said in a statement. “Together with Huatai, we have accomplished remarkable results, and we look forward to partnering with GTCR on the next phase of growth.”
AssetMark is our chosen core platform and source of our trusted information and education. In our opinion, this group continues to be "ever striving" on our behalf as advisors and clients. There are new strategists and managers added to the platform. Josh and I commit to staying well informed. We hope to review AssetMark client strategies this fall. We will schedule office visits or virtual calls.
In the meantime, it's summer! Our philosophy: Do all that you can while you can!
Politics is really about policies. Wall Street doesn’t see red or blue. It sees green. These are where the opportunities may arise as we move forward.
Family Preparedness:
Some research says that money habits form as early as age seven.
Kids ‘n Cash : Reach out if you’d like our Kids ‘N Cash materials on teaching money matters and the allowance systems. We prepared these for your children and now the materials are likely relevant to grandchildren.
Practical Preparation for graduates in your circle.
Career Roadmap, Setting Yourself Up to Reach Your Career Aspirations by Dr Greta Oliver is available at Amazon.
Fun Stuff:
Love this New Yorker Cartoon Caption Contest!
With that chuckle, go outside and play!