Market Update - Q2 2020

Wondering what has been going on in the stock market lately?  With a backdrop of investor concerns surrounding Coronavirus (COVID-19), an upcoming election, and oil price fluctuations, we have seen a lot of volatility in the markets.  The first Quarter of 2020 was incredibly volatile (Here is the link to our 1st quarter Market Review Video), but we saw a very nice recovery during the second quarter of 2020.  These short-term fluctuations can be very concerning for investors, but it is our belief that, when you hold a globally-diversified portfolio that has the right asset allocation for your specific situation, it is best to keep your eye on the long term outlook and ride out these periods of short-term volatility in search of long-term returns.  These are the principles we discussed in our Coronavirus Market Impact Video that we put out during the market volatility in March, and as a holistic wealth management firm, these are the principles that we continue to implement today.

As always, if you have any questions, please feel free to reach out.  


Stolz & Associates



(More information on the hike can be found here.)


Video Transcript...

Well, there are a few things that will get me out of bed at 3 a.m., and Mt. Rainier is one of them.  So, I'm gonna do a quick little hike today - I'm doing a quarterly market review, and I'm going to bring you along with me.  And, I promise, the view at the top will be worth it. So stay tuned. Well, I'm less than a mile in and already stopping because... Wow.

Well, I'm one mile in, so I figured I'd take a quick stop to talk about the US Stock Market performance.  You can see that the US market is about 57% of the global stock market as it relates to market capitalization.  So, if you have a global stock index, the US market should represent roughly 57% of that.  So, you can see it was a really strong quarter, actually the best quarter ever.  So, just over 22% return in three months.  Obviously, that's coming off of a really poor performance in the 1st quarter of the year, but definitely a very strong performance for the 2nd quarter of the year.

Well, we're two miles in now, so we'll talk about International Developed, which is 31% of the global stock market.  Coming off of its worst quarter, the 1st quarter of 2020, also had some strong performance in the 2nd quarter to help recover from that.  So just over 15% from International Developed.  As you look into International Emerging Markets, which is only 12% of the global stock market, actually a nice recovery there.  It had a bad quarter last quarter, obviously, just like everything else, but over 18% return in the 2nd quarter.  So, a nice rebound for US, International Developed, and Emerging Markets.  So, a couple of miles to go until we get to the top.  There's a marmot over here...

Well, that's the top of First Burrough.  We have two more to go - a couple more miles.  I guess a mile and a half or something, so we're getting there.

Well, that's Second Burrough.  There's one more to go over here, but almost there.

Well, I made it - 4.6 miles later, but definitely worth going up to the Third Burrough.  The Second Burrough, you'd save probably 3 miles round-trip, but the Third Burrough is very nice.  The mountain's right there.

So, just finishing things up.  Global Real estate was up 11% for the quarter - a strong quarter from Real Estate.  And then the Bonds, offering stability like they're supposed to, 2.9% for the US Bond Market.  Just over 1.7% Globally in the Bond Market.  So, definitely strong performance all around in both the the equity market and the fixed income market.  Sorry - all the bugs are everywhere here.  I just saw a hummingbird over here too, which is kind of strange.  You wouldn't expect to see them up this high.

We always try to finish these videos with some type of guidance.  I think, rather than talking about too much in terms of technical pieces of investing, the guidance for this quarter is now that we've seen the dip of the 1st quarter and we've seen a nice recovery in the 2nd quarter, I would just encourage you to think back and reflect on that.  How did that feel when your portfolio fell in value that much?  Basically, does that feel like that's the right level of risk for you?  In order to pursue higher expected return, you have to take on higher risk in your in your portfolio, and by "risk" we mean volatility.  So, during the first period of this year, you'd see a lot of volatility in a risky portfolio, where over the long term, you're expecting a higher return.  So, you just want to make sure you have that right fit.  If something didn't feel like it was quite the right fit for you, I'd encourage you to just reach out, talk to us, let us know.  We can make those adjustments.  Just reflect back on this on this last couple of quarters and how that felt, and make sure you feel like you have the right fit in your portfolio.  Thanks for watching.  I appreciate it.  This is a bit of a different video this time around.  I hope you like it.  Maybe we'll try to keep doing something like this in the future too.  So, we'll talk to you soon.  Thanks.