Financial Fraud and Scams

We continue to hear and read about the continual increase in financial fraud and scams that are ongoing. We would like to take the opportunity to remind everyone to stay vigilant and take time to reflect on suspicious phone calls or e-mails prior to taking any action. Please visit this link for a Financial Fraud and Scam Guide which outlines what to do if you’re a victim of a scam or financial fraud. As an added layer of protection, we may inquire with you on what requested cash is needed for.

For extra precaution, we suggest everyone considers having a Trusted Contact Person on file in case we can’t reach you. A Trusted Contact Person is someone you give us written consent to contact. We may contact them if we suspect you are being financially exploited, if we’re concerned about your ability to make decisions due to physical or mental incapacity, or if we’re unable to reach you. Your Trusted Contact Person’s role is to provide or confirm information only – they do not have any authority over your account, cannot make decisions on your behalf, and will not be given access to your detailed account information. We will not ask your Trusted Contact Person for information unless we believe it’s absolutely necessary to help you. Please click on the link to learn about a Trusted Contact Person.

Market Update

With the recent assassination attempt on Donald Trump over the weekend, his odds of winning the November election have increased. The market reaction on Monday was positive in anticipation of his expected policies. Historically, markets have initially had short lived declines with a quick recovery during presidential shocks. Prior to these recent events, the summer has gotten off to a reasonable start with global equities moving higher in recent weeks. The prevailing market narrative – decelerating inflation that is paving the way for central banks to cut interest rates – was reinforced by June’s weaker-than-expected U.S. inflation data. Moreover, U.S. Federal Reserve Chairman Jerome Powell’s recent commentary suggested the Fed is growing more comfortable with the inflation backdrop and is beginning to pay more attention to slowing employment trends.

The backdrop above has driven global equity markets higher this year, with the U.S. leading the way. But, as has been the case for some time, U.S. gains have been heavily influenced by large-cap technology, and more specifically, anything related to artificial intelligence. This momentum may continue for some time, but a few things warrant attention.

The U.S. market has become more expensive over the past year. While valuations are more reasonable if one excludes the large “tech” stocks that have led markets, they still sit above historical averages. That may have bigger implications over the longer-term than it does for the rest of the year. Meanwhile, our confidence in the sustainability of a bull market is usually highest when gains are driven by a broad range of stocks and sectors. But that hasn’t exactly been the case this year, though there is always the possibility that market leadership could broaden, or shift to other sectors. We don’t view investor sentiment as overly optimistic yet, which can often be the case near market peaks, but it is more positive than it was a year ago, suggesting there is growing risk of some investor complacency. Most importantly, the risk of recession remains above average based on various factors we monitor. As a result, we believe the range of possibilities for equities is wider than normal despite the market strength to date.

Outside the U.S., and “tech” in particular, equity markets sit at valuation levels that are more balanced, reflecting some of the economic headwinds that exist in parts of the world. On the fixed income front, yields remain attractive in our view, and higher quality bond exposure can act as a stabilizer in portfolios in the event equity market volatility returns. Overall, our approach to managing portfolios remains a bit more cautious at this time given the range of potential outcomes. We remain committed to regular rebalancing to mitigate the risk of overexposure to any one market or sector’s idiosyncrasies.

We want to wish you and your loved ones a safe and happy summer.

Should you have any questions, feel free to reach out.