By Crystal Prachyl
Market Update:
As we enter Q3, markets are hovering at all-time highs. We expect the recovery to continue and have highlighted areas being monitored below. We will keep you updated throughout the remainder of 2021 and are here anytime to answer questions.
Continued Recovery:
Increased COVID-19 Vaccine Distribution
People returning back to work
Global economy continues to open, specifically in Europe & Japan
Service industry, energy, financials, travel & leisure sectors continue to rebound
Areas we are Monitoring:
Inflation: June CPI = 5.3%
We agree with the Federal Reserve Chair and also believe the increase in inflation is temporary. At this time we think the US economy will have higher inflation for the remainder of the year but will be reduced as the work force returns back to employment and supply chains normalize.
Overvaluation of equity markets of historic norms
This is a concern and we expect volatility; however, there are few indicators of the market losing momentum in the near future.
$3.5 Trillion Proposed = expand Medicare, address climate change, education & childcare
$579 Billion Bipartisan Infrastructure Agreement
In order to fund the Infrastructure Agreement and proposed legislation, we are likely looking at higher tax rates for large corporations and individual taxpayers. We do not believe the tax structure will be impacted in 2021 and will continue to stay updated as tax proposals are issued
Portfolio Overview:
Portfolio positions are diversified & include companies with strong financials
Slightly increase global positions as the rest of the world recovers from COVID
A tug-of-war between Value & Growth stocks = equally invested in both
Higher cash position (+5%)
Treasury-Inflated investment as a hedge
Fixed income has recovered from the rocky start we experienced Q1 of this year: rebound expected to continue as corporate earnings normalize and interest rates remain suppressed.
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