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. In our, This is Life section we share life perspective to consider as we continue to navigate the pandemic. In our planning section, we discuss simple ideas to get financially organized, so you can start 2022 off on the right foot.

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 as we navigate the first quarter of 2022:

Litman Gregory 

• Covid remains a variable for the near-term economic and market outlook. While infections have surged, deaths have not.
• Fiscal policy is set to turn from a tailwind to a headwind. Relative to fiscal boost of 2020-21, 2022 will see less stimulus. Drag of about 2.5% of GDP.
• Given the increasing concern over the magnitude and tenure of the inflationary pressures in the economy, the Fed is accelerating its timeline and pace for tightening.
• Other Central banks from around the world are already in tightening mode. One year ago, 90% were decreasing rates. That number is now approaching 50%.

Ned Davis Research

• Global Asset Allocation Current –
  • 70% stocks (Overweight compared to 55% benchmark)
  • 5% cash (Underweight compared to 10% benchmark)
  • 25% bonds (Underweight compared to 35% benchmark)
• The speed of rate hikes will influence market returns. Expect higher volatility in 20022 than what we saw in 2021. Broader technical indicators for the US stock market remain positive, but they have been slowly deteriorating. Will be monitoring our models should these indicators continue to show signs of divergences.

Charles Schwab Market Perspective

• While markets had already priced in three rate hikes this year, the prospect of QT in 2022 was a surprise as it’s a departure from the Fed’s approach in past cycles. The Fed had waited 2 years after its first interest rate hike to start letting the balance sheet shrink. There is greater urgency this time with inflation running hot and this cycle starting with extremely loose financial conditions and negative real interest rates.

The prospect of higher interest rates has made it a rough start for the bond market and has dented the performance of companies with elevated stock valuations and/or weak fundamentals.

Our Conclusions:

• Think of the economic growth in 2020 and 2021 as bracketed outlier years. We will likely be heading back to sub 2% growth for the foreseeable future.
• While the economy is in no danger of a recession, the pandemic remains uncontained, domestic and global political and social tensions are elevated, the risks of an economic policy mistake has risen, caution is therefore 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.

We have made adjustments to our portfolios to reflect our opinion and concerns of the economy and the current investment environment.

This Is Life- "Perspective and Positivity"

Well….. we were all just getting used to the economy opening up again and the possibility of some resumption of normalcy over the holidays…..BUT!!!!! As we all know…. circumstances can change. OMICRON entered our lives. In my case, all three of my boys caught the variant. Oddly, my youngest, who is not vaccinated, had the mildest reaction, and my two other boys who were vaccinated did ……. What is more confusing is that I did not catch the variant.
 
Our plans for a large family gathering of 30 people changed in a blink. The four of us sat down to a quieter Christmas dinner of filets with all the “fixings”. As I looked around the dinner table, I could not help but think about the adjustments all of us are making over the holidays. I think it is fair to say we are all at our best and happiest when we can be around those we love during special times. If given the choice between a fancy Christmas dinner OR spending time with family, friends, and those who matter to us……. We would all pick the latter…….
 
As financial planners and wealth advisors, we cherish the times we are privileged to help you deal with the ever-changing experiences and challenges that can interrupt your day-to-day routine. I think we can all agree life happens! More importantly, how we respond to those moments of change is extremely important. Our GFP family is comprised of people who care and enjoy helping others. Whether it’s Hung, Casey, Danny, Jannette, or myself talking and listening to you, we are most appreciative that you come to us for help and perspective. Portfolio management and financial planning is our profession. BUT our passion is simply helping and listening to you!

Our GFP Family sincerely offers you and yours a prosperous 2022!
 
All the best,
 
Guardian Financial Partners

It's a New Year!

Starting a New Year presents a new opportunity to reset and renew.  Many people have New Year’s resolutions focused on bettering themselves and their overall wellness. If your goal is to improve your financial life, it can be as simple as getting financially organized and doing a financial assessment. We have provided below a couple of worksheets to start the process. If you have questions, please schedule a time to talk below. 

1. Understand Where Your Money Goes- In a world of subscriptions plan and buying items with a click of a button, it is easy to lose track of how much we spend. Sometimes the best way to get organized is to review where your money goes. We create a simple budget to get you started. Click here. 

2. Your Annual Checkup- The same way we go to the doctor annually for a physical, you can do a similar assessment of your financial life. To make this process easier, use this checklist to identify the areas to review. Click here for the checklist. 

3. Revisit or Start Your Financial Plan- The New Year is a great reason to take action and either revisit your plan or start one. In our experience, the financial planning process might seem daunting at first but leads to confidence in your financial life.  We can help you start the process! 

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 here and pick a time on our calendar.