“Don’t fight the Fed.” Old investment saying

One of the popular questions we’ve received lately is what do stocks do after the first rate hike? Let’s be clear, we think the Federal Reserve Bank (Fed) will leave rates low until at least 2023, but what if we get a sudden dose of inflation? This isn’t our base case, but a rate hike could potentially happen sooner in that situation.

After all, the first rate hike in 2015 set off a huge sell-off into early February 2016, as the market was quite upset and let it be known that it felt the Fed acted too soon. In fact, the first hikes of 20

“Price is what you pay; value is what you get.” – Legendary value investor Ben Graham.

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Valuations matter—at least in the long run. We believe it to be true in the equity markets and in the fixed income markets as well. What you pay for an asset ultimately impacts your returns. So when looking at markets, we use, among other things, market-based metrics to help determine valuations. Within fixed income, while we don’t have the various price ratios, for example, to help guide the valuation conversation like equity investors do, we do have yield and spread measures. Two common metrics that we use in

Global stock markets are off to a strong start in 2021 as the world begins to emerge from the shadow of the COVID-19 pandemic. In the United States, vaccinations are increasing, the economy is expanding, unemployment is falling, and stimulus continues to flow through the economy. With the consensus crowding into an optimistic corner, many investors are wondering if sentiment may be running too hot.

Getting Better, Not Worse 

Against a backdrop of historic fiscal and monetary stimulus, the global economy is emerging from the pandemic. With vaccination rates increasing—nearly 50% of the adult population in the U.S.

Index Performance

U.S. and International Equities

This quarter provided positive results for all major market indexes. The top performer and standout was the US small cap Russell 2000, returning over 12% for the quarter. The international developed and emerging markets, as denoted by the Morgan Stanley Capital International (MSCI) Europe, Australasia, Far East (EAFE) and Emerging Markets (EM) indexes, both finished the quarter higher.

Energy, Financials and Industrials Show Double-Digit Returns

The energy sector, which started its rebound during the fourth quarter of last year, returned over