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Rebalance Announcement – January 10, 2022

2021 was a unique year for asset class returns, with U.S. stocks soaring higher by 28.71%, while investment grade U.S. bonds declined by just over -1.54%. This has caused investors’ portfolios to drift away from their target allocations, leaving many with an overweight to equities and a corresponding underweight to fixed income.

Large Losses or Dividend/Capital Gains Distributions?

Over the past week, we have received several calls regarding what appears to be large drawdowns in certain ETFs in our portfolios. In both instances, the drawdowns resulted from large dividend or cap gain distributions, not actual losses. It is common for a fund or ETF to trade “ex” the dividend a few days before seeing the dividend post to accounts. At first glance, it can take you by surprise, with the immediate reaction being poor market performance as the likely cause.

November 2021 - Market Flash

News of a new COVID variant, dubbed Omicron, and hawkish language from Fed Chair Jerome Powell led to a volatile month for both equity and fixed income investors. Equity markets ended the month lower by -0.69%, despite starting November on strong footing. This decline began on Black Friday and coincided with the announcement of the newly discovered Omicron variant.

Where Have the Shale Drillers Gone?

Earlier this week energy consumers witnessed a war of wills between energy consuming nations, led by the U.S., and the energy producers of OPEC+.  The oil consumer group, in response to rising oil prices (+60% since the start of 2021) and a lack of additional supply from OPEC+, recently announced a plan to release a portion of their strategic petroleum reserves.  OPEC+, in turn, stated they would meet such release with a cut in production.  All of this be