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Daily Blog

Thursday, June 13, 2019

The best hockey players don’t skate to the puck, they skate to where the puck is going to be. Easier said than done, especially when it comes to investing. Often the best performing asset class or sector in one period is the worst performer the following period. For example, look at the healthcare sector: it was last year’s power play but this year has been relatively iced, lagging all other sectors of the S&P 500 index. Reversion to the mean is a powerful force, and investors who keep trying to predict the best performers often find themselves in the penalty box.

This has been a confounding year for investors. The market is up for the year but decelerating global growth and trade uncertainties have investors on edge. Stocks sagged in May but have rebounded sharply so far in June. Recently investors have been warming to a possible interest rate cut but the labor market data do not support a cut — the average monthly payroll increase over the past twelve months is 196,000. Even though the past three months have seen deceleration, the monthly average is still 151,000. Both the twelve- and three-month averages are higher than trend labor force growth over the past year.

One thing is for certain: corporate earnings are still gliding forward. In our view, so far it has been a great year to own both stocks and bonds: global diversification — it’s like playing all over the ice so the puck hits you.

For background on global strategic diversification, please see page 4 of the Voya Global Perspectives book.

Diversification does not guarantee against a loss and there is no guarantee that a diversified portfolio will outperform a non-diversified portfolio.

Weekly Commentary & Statistics

Monday, June 17, 2019

Despite a Friday pick-up, global stocks declined in a week largely devoid of meaningful directional drivers.

Quarterly Commentary & Outlook

April 2019

During the first quarter of 2019, a field of green across the board replaced the steep market declines of 4Q18. Double-digit equity returns rewarded investors in U.S. and international markets alike.

  • Slowing global economic growth is a function of the eighth fed funds rate increase in two years
  • Now that the Federal Reserve seems on hold, markets have breathed a sigh of relief
  • Fundamentals tell us the market backdrop is strong, not so dire as portrayed in some media
  • It seems “bear market” concerns have shifted to fear of missing a continuing rally

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