Newsletter Q4 2023

We must be careful here and go where the puck isn’t to butcher a Wayne Gretzky saying. That means being contrarian – focusing on opportunities in value and dividend-paying stocks and other stocks that have underperformed as well as stocks that are well-positioned to grow earnings and cashflow. There is clearly a path for continued appreciation in equities if the so called economic “Soft Landing” holds true and inflation continues to decelerate to more normalized levels. However, after coming off such a growth driven outperformance in stocks, we are more comfortable primarily sticking to finding undervalued companies with durable cash flows, solid balance sheets, strong competitive positions, and consistent dividend growth that trade at attractive valuations.

Newsletter Q3 2023

Shorepoint remains constructive on the equity markets but stingy on what we want to pay for stocks, particularly with money market funds paying over 5% and stocks trading at a premium to historical averages. We have reduced our equity allocation in growth portfolios and added to cash. We continue to add to higher-quality dividend-paying stocks that have underperformed this year. Shorepoint’s investment approach is contrarian, so we are gradually adding to attractively valued, underperforming stocks/sectors and taking profits/trimming some past winners. We also continue to perform tax loss harvesting in this volatile market which minimizing capital gains for clients in 2023 and potentially in future years.

Newsletter Q2 2023

Despite the prevailing economic concerns, as investors, we must look through the noise and focus on what matters most – identifying high-quality companies that can benefit from any economic malaise. With many potential risks still lurking, we continue to opt for companies with durable cash flows, strong balance sheets, and strong competitive positions, trading at attractive valuations.

Newsletter Q1 2023

It was clear that the aggressive moves of the Fed to try to thwart inflation could lead to some unintended consequences. And in short order, the recent banking scare, albeit a marginally different beast than the financial crisis of 2008, has caused panic among investors and depositors. Only time will tell, but some type of recession (earnings and/or economic) is likely, while hope for a ‘soft landing’ seems to be fading.

Newsletter Q4 2022

The walls of worry are endless, and the odds of the U.S. entering a recession are a foregone conclusion, especially if you ask any economist at any major investment firm. But the market is forward-looking and often a good predictor of what may come. Thus, it is plausible that 2022’s negative returns were the market telling us that we are in or entering a recession. As contrarian Humphrey B. Neill says, when everyone thinks alike, they are often wrong. It’s better to think creatively and differently about possible outcomes and timing.

Newsletter Q3 2022

The metaphor of the skipping record may be lost on many of our readers. We understand our advice may seem frustratingly similar and simple to articulate-that is, keep buying the dips in cheap, quality asset classes. We are upgrading the quality of clients’ fixed-income positions now that we do not have to “reach” for yield.

Newsletter Q2 2022

We believe in the resilience of capitalism and the ability for well-run companies to adjust and manage through times like this. So, we look at the next 6-8 months as a time to be picky, to diversify, and to avoid big calls or undue risks, especially after the powerful multiyear run we have enjoyed in the equity markets. Hopefully things turn out better AND sooner, but let’s not expect that. This year will be one to build portfolios for the next leg in the economic cycle.

Newsletter Q1 2022

Shorepoint’s advice in the face of all these points is to keep your expectations for making money in 2022 modest. The market’s reaction to the dour news has been decidedly muted but the probability of a recession has increased. We are treating rallies thus far as bear market rallies. We have decreased our core bond exposure given the rising rate and inflation environment. In turn, we have added to income-producing assets that are more resilient to interest-rate risk, such as floating rate bond funds, short-term inflation-protected bond funds, and cash. In addition, we have been adding to stocks on weakness as we find pockets of value in stocks of great companies that are attractively valued in the broader market. Some areas that look especially attractive are in healthcare, communications, industrials, and finance.

Newsletter Q4 2021

Try not to stress about news, politics, and issues we can’t control. Instead, focus on what you can do. Read. Nap. Spend time with family. Watch a good show. Go for a walk or get some sunlight on your skin.

Ok we will get back to the financial advice:

  • Expect market volatility with lower returns.
  • Spend less in economic downturns.
  • Spend more but also save more during the good times.
  • Consider part time work if you are retiring early or plan to do so.
  • Engage with us on making sure your financial plan is as accurate as can be.
  • Think and talk with us about how much risk you are comfortable taking with your investments; we have tools to model various scenarios for you.
  • Believe in the process of investing; when you feel yourself faltering, compare your long-term investment returns to your bank accounts.

Newsletter Q3 2021

Shorepoint’s process is thoughtful, disciplined, and flexible. Please know that our team is working diligently to manage risk and returns as well as position your portfolio for the long term. There are always reasons not to invest, but staying the course usually wins out. We believe that appropriate portfolio diversification amongst asset classes can help buffer your portfolio from the ups and downs of market volatility.