Thought Leadership Resource Center
For centuries investors have invested in gold in pursuit of various purposes depending on individual financial goals and market conditions. Traditionally thought of as a safe-haven asset, owning gold on occasion has produced attractive returns. The price of gold has risen by about 13% in the first four months of 2024 and by over 80% in the past five years.
Read MoreInflation has been the hot button topic of the year. Seemingly every article, news segment, or social media post in regard to the market or economy will include at least some reference to inflation and the role it plays. Most of these references are about its effect on the consumer or how it has changed outlooks for various companies. What perhaps is lesser known, however, is the role CPI has in many government-stipulated figures such as Social Security benefits, qualified plan contribution limits, and income tax brackets. This article will focus on the various figures that are, in one way or another, tied to the CPI and its implications for American investors and retirees.
Read MoreInflation Reduction Act Summary
If you have been following the political news lately, I am sure you have heard of the Inflation Reduction Act. Often it is difficult to get away from the sound bites meant to stir controversy and determine what is in new legislation, and how to respond accordingly. In this thought leadership piece, we have sought to distil down the main points of the new act into a concise summary and call out where action may be appropriate.
Read MoreThe global capital markets have been besieged this year by an unusual and disturbing mix of headlines. Over these same months key economic measures have demonstrated resiliency, even as consumer confidence has collapsed.
Read MoreFor more than two weeks, the people of Ukraine have bravely fought back against the Russian invasion of their sovereign country. By all accounts, their resistance has far exceeded the original prediction that the country would fall in days, if not hours. While it is widely believed that Russia maintains a military advantage, things have not gone well for Putin. The growing fear now is that Putin, having cornered himself, may soon begin to act even more irrationally and indiscriminately.
Read MoreWith geopolitical tensions and the war in Europe dominating our headlines, the two-year anniversary of the S&P 500’s pre-COVID market peak went largely unnoticed. Just over a month after the peak, the S&P 500 had plummeted by more than 30% before beginning an epic rally of 114%. While it is now hard to imagine a world without COVID, it easy to see that COVID has forever changed many aspects of our lives.
Read MoreInflation is a monetary phenomenon and in the short term can be affected by supply/demand dynamics. The Investment Policy Committee of Clearwater Capital has written extensively about the dramatic rise in the M-2 Money Supply over the last two years emanating from fiscal spending which ‘flooded the world with cash’ following the COVID shutdown of the economy.
Read MoreAfter a strong 2021, stock market volatility returned in dramatic fashion in January. The S&P 500 has had an intraday trading range of at least 2.25% in January’s final week (Bespoke). The average stock is down a little more than 9% so far in 2022, but stocks with the highest valuations are down closer to 20%.
Read MoreFor many, 2021 proved to be a difficult year. The battle with the COVID pandemic dragged on even with readily available vaccines and developing therapeutics. Variants of the virus have emerged, and the economic recovery coming out of the pandemic’s peak has remained uneven with several start / stop phases along the way. This has broadly disrupted the production and supply of goods and services, while inflationary pressures have surged.
Read MoreAs the year comes to an end, Clearwater Capital’s CEO and Chief Investment Strategist, John Chapman, offers an extended point of view on the U.S. economy and equity markets in this final Private Client Letter for 2021. Our Outlook 2022 report is scheduled for publication in January.
Read MoreStagflation is the term used to describe an economy that has stagnate economic growth while having higher inflation and higher unemployment. Stagflation can be seemingly contradictory as stagnate economic output leads to higher unemployment, which normally should not lead to rising prices as economic demand falls. For the most part stagflation is rare, in fact we have not seen a stagflation type period for almost 50 years. We have to go back to the 1970’s to find a true stagflationary period.
Read MoreAs we make our way through 2021, bond investors continue to face the challenge of finding income/cash flow in a world of low interest rates. While the 10yr US Treasury bond rate has had a meaningful increase to start the year from just under 1% to about 1.6%, this interest rate is still at extremely low levels compared to historical context. Bond investors have seen yields drop for close to 40 years now. The drop in yields over these 40 years has resulted in amazing returns for bond investors because as market rates fall, bond prices rise. This inverse relationship between bond prices and interest rates is known as interest rate risk and is defined as the risk a bond’s value could change due to movement in prevailing market rates, shape of the yield curve, and various other interest rate relationships. In addition to interest rate risk, bond investors also face credit default risk, which reflects the borrower’s ability to repay the loan over time. In this piece, we will focus on where to find income and the asymmetric interest rate risk bond investors face today.
Read MoreIt has been just over a year since the equity markets hit their COVID-19 lows. On Monday March 23rd, 2020, the broad indices all hit new lows after nearly a month of indiscriminate selling as the scope of the pandemic became clear. Since then, the Dow Jones Industrial Average and the S&P 500 have both gained just about 80% and the NASDAQ 100 is up about 90%. Many large cap stocks have doubled, tripled or more from their panic-induced 2020 lows.
Read MoreDisclosures:
THIS COMMENTARY HAS BEEN PREPARED BY CLEARWATER CAPITAL PARTNERS. THE OPINIONS VOICED IN THIS MATERIAL ARE FOR GENERAL INFORMATION ONLY AND ARE NOT INTENDED TO PROVIDE OR BE CONSTRUED AS PROVIDING LEGAL, ACCOUNTING, OR SPECIFIC INVESTMENT ADVICE OR RECOMMENDATIONS FOR ANY INDIVIDUAL. ALL ECONOMIC DATA IS DERIVED FROM PUBLIC SOURCES BELIEVED TO BE RELIABLE. TO DETERMINE WHICH INVESTMENTS MAY BE APPROPRIATE FOR YOU, PLEASE CONSULT WITH US PRIOR TO INVESTING. INVESTING INVOLVES RISK WHICH MAY INCLUDE LOSS OF PRINCIPAL. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities, insurance products, or to adopt any investment strategy. The opinions expressed are as of the date of writing and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Clearwater Capital Partners to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Investment involves risks. International investing involves additional risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. S&P 500 is a registered trademark of Standard & Poor’s Financial Services, a division of S&P Global (“S&P”) DOW JONES, DJ, DJIA and DOW JONES INDUSTRIAL AVERAGE are registered trademarks of Dow Jones Trademark Holdings (“Dow Jones”). The two main risks related to fixed-income investing are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest payments.
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