Our mission is to help you Preserve Your Assets and Protect Your Lifestyle. In this month's newsletter, we provide a quarterly market review with key observations from our three research partners. We share life perspectives on dealing with tough times in our lives and in our planning section, we revisit an educational tool that can help educate and empower you with your financial future. 

As always your well-being is everything to us. If you have any questions about your financial or investment plan, please contact us anytime. 

Quarterly Market Review

We thought it would be beneficial to share with you some key observations from three of our research partners along with an outline of our conclusions. 

Litman Gregory 

1. Global stocks and US core bonds are both down YTD as markets digest higher inflation, rising interest rates, and geopolitical uncertainty.
2. Short-term inflation expectations are sharply higher but longer-term expectations remain in Fed’s target range…so far.
3. The Fed has signaled its intention to raise rates at every Fed meeting, with possibly one or more 50 bp rate hikes and to also begin reducing its balance sheet. “Fast” Fed tightening has historically been bad news for stocks.

Ned Davis Research Digest

• Global Asset Allocation Current –
  1.  55% stocks (Marketweight compared to 55% benchmark)
  2. 15% cash (Overweight compared to 10% benchmark)
  3. 30% bonds (Underweight compared to 35% benchmark.
• The global economy is poised for slower growth, but still strong growth in 2022, as high savings and wealth, pent-up demand, and the broadening of vaccines globally support growth. The Covid pandemic, supply chain issues, elevated inflation, and tighter global monetary policy present risks to the outlook.  The market remains extended versus its longer-term trend and does suggest we are longer-term extended to the upside given valuations and Fed tough “talk”.

Schwab Market Perspective

Stocks have had two back-to-back downturns this year, followed by a relief rally. Fed tightening and the war in Ukraine has been the dominant macro forces. The correction earlier this year was largely about higher inflation and rate hikes. More recently, the inversion in the yield spread between 10-year and 2-year Treasuries has heightened recession risk. However it doesn’t appear as if the stock market has appropriately priced in likely weaker economic growth to come – or the likely weaker accompanying earnings growth.

Our Conclusions:

• Fed is facing a tough choice. Fight inflation by raising rates dramatically but risking that markets (stock/bond/real estate) get hit in the process or allow inflation to fester by keeping low-interest rate regime intact and potentially risking a stagflationary environment. (High inflation, low to no growth).
• Hence the risks of an economic policy mistake have risen, therefore caution is still warranted. As such, we continue to emphasize a “bend-but-don’t break” philosophy with the portfolios, taking a patient and deliberate approach in deploying capital to assets with resilient cash flows across multiple economic scenarios.
• We remain well-diversified across a range of global asset classes (While stocks and bonds have poor investment outlooks ahead, they are still a necessary building block of any portfolio) while also including some alternative strategies and income instruments to help provide a ballast.

If you have questions about your portfolio, please contact us anytime. 

This Is Life- "For the Love of Sports"

Life Perspective from Hung Nguyen, Founding Partner

Sports have always been a big part of my life. Growing up, watching football or basketball on TV or watching my 3 older brothers playing soccer was a constant. I played some soccer as a kid but ended up participating in basketball and volleyball in high school and still “try” to play hoops to this day.

That love of sports was passed on to my kids. My son, Gavin plays club basketball and is headed to high school where he’ll follow in my footsteps with basketball and volleyball. My daughter, Lauren plays club soccer for a nationally ranked team (I know nationally rankings for 11 years old, crazy).

About a month ago, Lauren hyperextended her knee and ended up tearing her ACL. Apparently, I may have passed that on as well, as I too have torn each of my ACLs. While difficult to see your child in pain and not able to do her favorite thing, my wife and I have tried to use this as a life lesson for her. We all wish that we could go through life without any setbacks but that’s not real. How one handles setbacks and adversity, truly helps build and define character. Mom and dad will be there to help her with the tedious recovery process while keeping short and long-term goals in mind.

We recognize that life will test all of us at times. Whatever you might be going through, know that you can lean on your team at Guardian. As your advisors, aside from financial planning and investment matters, we are also here as a friend to lend an ear or a shoulder. Having said that, don’t feel sorry for her, because I know that kid will come back better and stronger than ever.

Education to Empower You

Last year we rolled out MyBlocks, a new technology that is designed to help educate and empower you. With the current market volatility, inflation, and other economic uncertainty, you may be thinking more about your money and long-term plan.  We thought it was a great time to revisit this unique tool. MyBlocks is an educational tool that allows you to pick from a variety of topics. Each topic has an interactive module designed to educate you and make it fun. Below are some of the topics:

Retirement - Social Security - Long-term Care - Health Care - Mortgage Refinance - Inflation - Family Protection - Income Protection - And More!

This technology requires you to register one time to set up your credentials. We also require the setup of secure dual authentication for your online protection. The entire process only takes 3-5 minutes. Please let us know if you have any questions.   You can register here.

We are here to help and offer objective advice. If you would like to discuss any of these topics or any questions relating to financial planning and/or the markets, please click below and pick a time on our calendar. Click here to schedule a time.