Affinity “Mark” et Minute – March 23, 2022
Investment Commentary – March 23, 2022
Year to Date Market Indices as of March 23, 2022
• Dow 34,709 (-4.47%)
• S&P 4,305 (-5.73%)
• NASDAQ 14,533 (-11.00%)
• Barclay Bond Aggregate (-6.46%)
• Fed Funds Rate .50 (up .25)
• Annual Inflation Rate 7.9%
The Impact of Geopolitics, Importance of Quality Equities, and the Opposing Forces Affecting Bonds
Simeon Hyman ProShares analyst
February was largely defined by Russia’s invasion of Ukraine. Our thoughts are with the people of Ukraine, and we hope that peaceful political solutions emerge soon. Understandably, war triggers an intense emotional response for many. As difficult as it may be confronting the investment challenges caused by major world events, it more often than not requires a distinctly non emotional response. Geopolitical events have historically had short-lived impacts on financial markets.
Drawdowns and subsequent recoveries have generally been measured in days or weeks, such as at the beginning of the pandemic or post 9/11, and confounded the timing of safe-haven trades. The speed of reversals also was not limited to the equity markets. The beginning of the pandemic saw investment grade credit spreads widen dramatically, but most of that move was reversed within a month. In just three months, those spreads were actually tighter.
The only event on this list with a longer-term impact was the Lehman Brothers bankruptcy. That event was a marker along the path of a deep and prolonged recession. Russia’s invasion of Ukraine, on the other hand, comes with a backdrop of a strong economy—a backdrop confirmed by the strong March 1 ISM Manufacturing report. The shorter-duration investment storms above may turn out to be reasonable guides.
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In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution.
Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies.
Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.”
Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.