New Frontier Advisors

An unusually strong tug of war between economic forces is playing out in global markets, with a booming economy and low unemployment offset by the effects of the Russian invasion of Ukraine and expanded inflation. Expectations over the timing and magnitude of Fed interest rate increases rapidly evolved as clarity began to emerge around central bank responses to inflation.

The year ended on a highly upbeat tone for investors as equities rose to new heights against a backdrop of inflation and a prolonged pandemic

After beginning the quarter on a relatively upbeat note, familiar themes returned as fears of inflation, ambiguity over the end of the pandemic, and uncertainty about the future of Chinese capitalism raised concerns for investors.

As the global economy continued to reopen and the recovery gained speed, markets reached new highs.

As the end of the pandemic came into view in the U.S. and the new administration’s stimulus plan became more probable, expectations for economic growth and inflation have increased.

Despite extensive economic and human costs, 2020 may be a turning point in multiple ways.

The U.S. economy improved significantly this quarter, but investors continue to face several serious risks. In late September, confirmed COVID-19 cases were rising worldwide, and the pandemic may intensify as winter approaches. A combative U.S. presidential election looms.

A key lesson of 2020 is the importance of staying invested even during times of high volatility. We believe that an appropriately risk-targeted, globally diversified portfolio is as important as ever. Maintaining an optimally risk-controlled portfolio is most desirable.

On January 1st, China informed the American government that a new pathogen, soon to be called the coronavirus, had been discovered in Wuhan, China. Its toxicity and infection rates were still unknown but soon proved to be far more virulent than many prior viruses.

It has been a great year for equity investors. The S&P 500 index posted a 31% annual return, the Dow 25%, and the NASDAQ a spectacular 39%. More than $6T of equity paper wealth was created for domestic investors this year alone.

It has been a great year for equity investors. The S&P 500 index posted a 31% annual return, the Dow 25%, and the NASDAQ a spectacular 39%. More than $6T of equity paper wealth was created for domestic investors this year alone.

It has been a good year for U.S. investors. The global economic slowdown and geopolitical turmoil created a nearly irreversible thirst for super safe assets...

At the moment, there are roughly 15T dollars of debt “earning” negative interest rates in the global economy, a state not anticipated in modern macroeconomic theory first proposed by Keynes and Samuelson during the 30s and 40s.

The quarter was a good one for investors, overcoming fears of an all-out U.S.-China trade war. The S&P 500 index rose roughly 4% for the quarter and was up ~17% for the year. It was the market’s best first half performance since 1997 and extended the more than decade long bull market.

U.S. stocks experienced their biggest quarterly gains in nearly a decade. The S&P 500 completed its best quarter since 2009, gaining 14%, while the S&P MidCap 400 and S&P SmallCap 600 gained 14% and 12%, respectively.

The last quarter of 2018 marked the dramatic end of the longest bull market in financial history, nine-and-a-half-years (115 months) of generally rising U.S. stock indices. December was the worst performing month since the Great Depression and the year was the worst since 2008.

As the quarter ends, the Dow Jones and S&P 500 indices, fueled by growth stocks’ appreciation, are at all-time historical highs, dominating the return from global investing. While the MSCI ACWI rose more than 3.5% for the quarter and 2% for the year, the MSCI ACWI-ex US was flat for the quarter and declined more than 5% year-to-date.

The law of gravity states that what goes up must come down. But the laws of economics say that investors generally are rewarded for staying invested.

The second quarter was marked with market volatility from geopolitical tensions, the president’s tweets, and “America first” rhetoric.

Markets began the year as they had been over much of 2017, but changed their tone over the quarter—volatility reemerged, interest rates rose, the dollar fell, and equity markets retreated.

The fourth quarter of 2017 closely resembled much of the first three quarters – global markets continued to grow steadily, resulting in positive returns for many strategic domestic and global equity investors.

The third quarter of 2017 closely resembled the first half of the year – global markets continued to grow steadily, resulting in positive returns for many strategic domestic and global equity investors.

The second quarter of 2017 closely mirrored the first. Global markets continued positive returns for many strategic domestic and global equity investors.

The first quarter of 2017 was a profitable one for many strategic domestic and global equity investors. All major domestic large cap indices are up for the year: S&P 500 is 5.53%, Dow 4.56%, and NASDAQ 9.82%. On the other hand, domestic small cap underperformed with the Russell 2000 gaining 2.12%.

The fourth quarter of 2016 was a profitable period for globally diversified multi asset managers. All major domestic large cap indices were up for both the quarter and the year.

It was a profitable period for well-diversified multi-asset strategic investors in global equity markets.