Greetings Clients and Friends:

More than 30 million Americans have filed for unemployment since early March, and yet the markets had one of their best months in decades. Year-to-date losses of the S&P 500 Index of large US company stocks remain around 11%. We are hopeful that the losses will continue to reverse, and we want to give you all credit for staying calm through this challenging time. The recovery seems far too optimistic as economic indicators and reports almost unanimously demonstrate severe and deepening damage to the economy.  As long as Congress continues to show bipartisan support for massive fiscal measures and President Trump keeps signing, the markets will remain optimistic.

One of the constant challenges in portfolio construction is to keep in mind that at any given time the underperforming assets will probably be the future winners, and the current winners will probably be the future underperforming assets. Applying that lens to our portfolios, Chief Allocation Strategist Steve Bobo and I are happy with how our strategies have held up, and we are also happy with our investments’ prospects. We placed some small trades yesterday in many client accounts, and we will place a few more today.

We don’t know how long it will be until we put this pandemic behind us and when our investments will recover and resume their climb, but what we know with certainty is that a longer time horizon flattens volatility and we are usually surprised to learn that the recovery started 6 months earlier.

Please keep us updated on your cash needs and we will get you to your goals.

Sincerely,

John