Newsletter Q1 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.

Newsletter Q4 2020

We prefer dividend-paying stocks to bonds, although having an allocation to bonds in portfolios is appropriate for diversification and to reduce overall volatility. The bond market, particularly government bonds, continue to be concerning, with interest rates at record lows and over $15 trillion in international government bonds trading at negative interest rates. We continue to diversify the fixed income portion of your portfolio in non-traditional bond sectors which rebounded in the later half of the year. Within equities, we will use a sizeable market pullback to add to high-quality stocks as they become more attractive.

Newsletter Q3 2020

Our current portfolio positioning is conservative relative to your personal investment objective and risk appetite. We are holding the highest cash and lowest equity levels in accounts than we have in over 10 years. This is reflective of the current market and economic conditions, the pandemic’s negative impact, and the uncertainty around the presidential election. We expect that these factors will continue to lead to higher market volatility through the end of the year. However, we look to add to equities on any meaningful pullback. We expect that any additional government stimulus would be constructive to the economy and markets. In the interim, we continue to make adjustments to our equity holdings to improve the overall quality of your portfolio and to take advantage of attractive opportunities. Our goal is to identify companies that will create economic value in this environment and develop long-term competitive advantages.

Newsletter Q2 2020

We feel confident about the repositioning we were able to do during the pandemic and ensuing market volatility. While we are not aggressive buyers of stocks at current levels, we will likely add to high quality equities on any meaningful weakness. However, the bond market, particularly government bonds, is worrisome, with interest rates at record lows and over $15 trillion in international bonds trading at negative interest rates. Low interest rates are a negative for savers, and at these levels, Treasury bond yields cannot keep up with current and future inflation levels.

Newsletter Q1 2020

We are hopeful, like everyone, that the spread of the coronavirus will run its course as quickly as possible and that the number of human lives lost will be limited. In the meantime, we want to assure you that we remain laser-focused on client communication, planning and portfolio management to assure both current income and competitive returns through market cycles. We have taken the current market dislocation as an opportunity to upgrade our holdings into higher-quality companies with a more durable business model.

We expect spikes in volatility through the second quarter as investors assess the near-term spread of the coronavirus and other geopolitical events. While developments in any economic and human pandemic are nearly impossible to forecast, Shorepoint’s process remains thoughtful, disciplined and flexible. This is a time when experience matters. Know that the Shorepoint team is working diligently to manage risk and returns as well as position the portfolio for the long-term.

Newsletter Q4 2019

We are cautiously optimistic that U.S. equities, and in particular dividend growth stocks with high free cash flow, can continue to move higher in 2020. In an economy with modest growth, low interest rates and above average valuations, returns will likely be driven by earnings growth. Recall from last quarter’s newsletter that we lowered our return expectations in September across stocks and bonds. We expect spikes in volatility through the year as investors assess the U.S. elections, trade negotiations and other geopolitical events. While developments in any macro category are nearly impossible to forecast, Shorepoint’s process remains thoughtful and flexible as we deal with the lowest interest rates and political conditions we have not seen in years.

2019 Annual Market Review

The year began with the government stymied by a shutdown, and ended with articles of impeachment levied against the president. In between, both domestic and global economies showed signs of slowing, all while the trade war between the United States and China loomed throughout the year. Nevertheless, investors remained relatively bullish toward stocks, pushing several major indexes to record highs.


©2020 Broadridge Investor Solutions, Inc.

Newsletter Q3 2019

We don’t have a dour view of stocks. Rather than try and call the economic cycle, we continue to invest in companies with strong free cash flow, strong business models, and conservative balance sheets. While we think there may be an earnings lull, and we worry about trade wars and Washington missteps or non-steps, the historically low unemployment rate around 3.5% with modest wage growth, should provide a ballast for the overall domestic economy. Furthermore, the weakness in manufacturing is relatively small compared to the strong consumer segment of economy which accounts for two-thirds of economic activity. In many economies, and in the U.S. in particular, households are enjoying low unemployment, rising wages, and savings from refinanced mortgages. With household wealth and incomes in relatively good shape, we believe the risks to the broader economy have fallen.

As a firm we have lowered our return expectations across stocks and bonds. Our dimmer capital market assumptions will result in clients’ target returns being slightly lower going forward. We are carefully reviewing how these changes affect clients’ financial plans, and we will be reviewing these results in detail with you in our meetings and calls over the next 6-12 months. We will continue to reflect—to be thoughtful and flexible as we deal with interest rates and political conditions we have not seen in our careers. As ever, we remain focused on navigating risks and identifying opportunities.

Quarterly Market Review: July-September 2019

The third quarter was full of ups and downs for stocks, much like the second quarter. Stock values moved in response to the rhetoric from the participants in the trade war between the United States and China. The Federal Reserve lowered interest rates two times during the quarter. More new jobs were added, but at a reduced rate, while wage growth continued. Manufacturing and industrial production remain muted, influenced, in part, by the waning global economy. Nevertheless, consumers were undaunted by economic developments, spending at a steady rate throughout the quarter.


©2019 Broadridge Investor Solutions, Inc.

Quarterly Market Review: April-June 2019

The second quarter was full of ups and downs for stocks as investors had plenty to worry about. Throughout the quarter, the trade war between the United States and China ebbed and flowed as news continuously changed from positive to negative. Employment was steady and the unemployment rate remained low, but wage growth was moderate at best. Manufacturing and industrial production hit a snag during the second quarter, as did business fixed investment.


©2019 Broadridge Investor Solutions, Inc.