Phil, Mike, and Larry discuss whether the classic 60/40 portfolio (60% stocks, 40% bonds) is still a valid strategy for investing and if index investing is a losing proposition. They then discuss the 72% plunge Tesla’s stock has experienced over the past year. They look at whether Tesla needs to fall more, if it will fall more, or if the stock is now a buying opportunity.

Submit your questions to [email protected]

As always, if you have any questions at any time, please feel free to call your adviser directly at (845) 691-4035.

As we start a new year, we present our annual “Firm, Economic, and Market Update”.

2022 has been quite a turbulent year. Events such as the Russia-Ukraine war, global inflation, the quickest series of Federal Reserve rate hikes ever, and devastating natural disasters all have weighed on the markets and global economy. 

2022 saw stocks and bonds both decline for each of the first three quarters. This has not been seen in 50 years. The rise in interest rates and compression in equity valuations stem from the worst inflation in 40 years, even as earnings estimates improved for the first 6 months of the year. High Price to Earnings (PE) stocks struggled mightily as interest rates went up during the past 12 months. Volatility was at historic highs for both stocks and bonds. 

Perhaps the single biggest change to the financial markets in 2022 was the transition from quantitative easing (low interest rates) to quantitative tightening (high interest rates). The era of free money is over. Interest expense will inevitably consume a greater share of income.

In the attached video, we run down our 2022 forecast, our “report card” (05:00). In line with our long-term average, out of 13 predictions we made this year, we saw 11.5 come true.

As we look to 2023 the most important question is will we have a recession? The answer to us is actually quite straightforward: if inflation starts to ease as economic activity slows, then no. Interest rates will stop rising and recessions, where and if they occur, will likely be modest. If inflation does not slow, all bets are off.

Our Team at Focused Wealth Management is in a unique position to provide financial clarity to our clients at the most critical of times. We value the opportunity to provide guidance, advice, and support during these volatile markets and are proud to meet our clients’ financial goals.

Best regards,

Philip J. DeAngelo
Managing Director, Focused Wealth Management

Phil, Mike, and Larry discuss tax loss harvesting, the process where you sell securities that have losses for the year to offset capital gains produced from selling other securities during the year. This is a great way to lower your tax bill. They talk about what moves you should make this week. They then discuss when the new rules for taking Required Minimum Distributions, or RMDs, from IRAs and 401k plans. They also explain how to determine how much your RMD should be and when you should take it.

Submit your questions to [email protected]

As always, if you have any questions at any time, please feel free to call your adviser directly at (845) 691-4035.

Phil, Mike, and Larry discuss the consumer price index, a key inflation marker, coming in lower than expected and U.S. Treasury Secretary Janet Yellen predicting that inflation will be much lower by the end of next year. They then discuss when will the market stop focusing on the Federal Reserve and interest rates and move back to focusing on corporate earnings.

Submit your questions to [email protected]

As always, if you have any questions at any time, please feel free to call your adviser directly at (845) 691-4035. 

Phil, Mike, and Larry discuss how much higher the Federal Reserve will raise the Federal Funds Rate and whether this will cause the yield on the 10-year US Treasury bond to rise back above 4%. They then discuss the state of high-interest corporate bonds and whether this is a good time to buy or has the moment passed?

Submit your questions to [email protected]

As always, if you have any questions at any time, please feel free to call your adviser directly at (845) 691-4035.

In the wake of Monday’s 1.5% drop across the markets on news of protests in China around its Covid restrictions, Phil, Mike, and Larry discuss why China’s problems are affecting U.S. stocks. They then discuss if the Federal Reserve has enough cash on hand to fund the total losses it will incur for all the asset liquidation to which it is committed.

Submit your questions to [email protected]

As always, if you have any questions at any time, please feel free to call your adviser directly at (845) 691-4035.

In the wake of Goldman Sachs predicting the bear market will last into 2023, and Cleveland Federal Reserve President Loretta Mester not ready to stop advocating for rate hikes, Phil, Mike, and Larry discuss their view of the economy right now. They then discuss if the holiday shopping season will be good or bad for the retail sector.

Submit your questions to [email protected]

As always, if you have any questions at any time, please feel free to call your adviser directly at (845) 691-4035.

In the wake of massive tech industry layoffs at places such as Amazon, Facebook and Twitter, Phil, Mike, and Larry discuss how this will change the tech industry and whether this is a good time to invest in the sector. They then discuss the bankruptcy of cryptocurrency exchange FTX and how it’s demise may cause a liquidity crisis throughout the other financial  markets.

Submit your questions to [email protected]

As always, if you have any questions at any time, please feel free to call your adviser directly at (845) 691-4035.

In the wake of last week’s rate hike by the Federal Reserve, Phil, Mike, and Larry discuss how much higher they think Fed will raise interest rates? They then discuss why Apple’s stock has fallen 10% this month, even as the broad market was rallying.

Submit your questions to [email protected]

As always, if you have any questions at any time, please feel free to call your adviser directly at (845) 691-4035.

Phil, Mike, and Larry discuss where people who plan on retiring with just an IRA or 401K account as their primary source of income should be putting their money today? They then discuss whether the Fed will stop raising interest rates after Wednesday’s meeting or will rate hikes continue considering the high level of inflation in the US.

Submit your questions to [email protected]

As always, if you have any questions at any time, please feel free to call your adviser directly at (845) 691-4035.