We wanted to post our mid-year letter, even though we are staring down the 4th Quarter within weeks. Our investment strategy will continue to take a cautious approach during these uncertain times. The market has been testing all-time highs as the COVID Delta variant is adding more concern about global economic expansion. Below are a few near term notes that are relevant to our year-end outlook. Please welcome Garrett Handke as the newest member to the Katahdin Financial Group Team!
- Looking at stocks, this is the 6th best start to a year ever for the S&P 500 Index. The rest of the year was higher 8 of the top 10 years with a solid 4.0% average return.
- Stocks haven’t had a 5% pullback all year, indicating volatility could be due. We would use notable pullbacks as an opportunity to buy for opportunistic reasons.
- We’ve favored stocks over bonds all year and we continue to expect better returns from stocks the rest of this year.
- Turning to fixed income, we continue to expect higher yields, with a target on the 10-year treasury yield of 1.75%.
- This could continue to pressure bonds, but we continue to favor mortgage-backed securities and shortening up duration.
- The House Ways and Means Committee has floated its initial proposal for tax increases to help fund the 3.5 trillion infrastructure bill (we expect the final number to be lower). The announcement launches a short but intense period of negotiations.
Click below to access the 2021 Mid Year Letter and the Getting to Know Garrett Handke.
Cheers,
Jay
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
All investing involves risk including loss of principal. No strategy assures success or protects against loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.