Stock and Bond Markets Across the World are in a Heightened State of Volatility: Market Commentary from Cabana’s CEO – March 1, 2022

2 years ago

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I will start today’s commentary with a prayer for peace and an end to war. There are times when talking about the gyrations of the stock market seems trivial and almost impolite. Today is one of those times. As a husband, father, grandfather and citizen of this earth, I am afraid. I am afraid that we haven’t learned from the past. I am afraid that anger and impulse is more prevalent than reason and diplomacy. I am afraid that we are not leaving the world a better place than when we got here. I wonder what my granddaughter will see when she takes her turn at the wheel. Of course, my parents and their parents had the same fears and lived through worse. Maybe it is just an inevitable part of life. I wish it wasn’t. 

Stock and bond markets across the world are in a heightened state of volatility as developed nations (and by proxy their economies) grapple with the implications of a major war in Europe and the isolation of Russia. The fallout will undoubtedly impact the United States as well as Europe. First and foremost is the impact on energy prices and the positioning of the Federal Reserve in raising rates in response to inflation. The Fed’s job just got a lot harder. It now must balance the needs and potential response of our own economy with the rest of the world. For better or worse, the economic fabric of the United States, Europe, Russia, China and everyone else is very much integrated. A misstep in Fed policy can have ripple effects everywhere. With the uncertainty and the major equity indexes moving as much as 3% a day, there is little room for misstep. The S&P 500, Dow and Nasdaq all remain below their 200-day moving averages and have broken below their January lows. The 200-day moving average is an important technical line in the sand and evidences a correction at best, and the beginning of a bear market at worst.  

Looking under the hood at individual stocks, things look even more tenuous. Many of the stocks that make up those benchmarks are already in bear market conditions, having dropped more than 20% from recent highs. Treasuries and gold are outperforming other assets in a flight to safety by investors. We discussed the overall state of things last week and suggested it is a particularly good time to avoid guessing the next direction and just try to tread water and live to fight another day. If anything, the past week and the formal outbreak of war has driven that point home.  


June 22, 2022

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Commonly used index/benchmark definitions:  

All indices and categories are unmanaged and an individual cannot invest directly in an index or category. Index returns do not include fees or expenses. Benchmark indices will likely materially differ from Cabana’s portfolio strategies. Detailed information as to how the returns are calculated can be obtained online from the following link: 

Morningstar’s Moderate Target Risk index  follows a moderate equity risk preference and is based on well-established asset allocation methodology from Ibbotson Associates, a Morningstar company.  

Morningstar’s Tactical Allocation category includes portfolios that seek to provide capital appreciation and income by actively shifting allocations across investments. These portfolios have material shifts across equity regions, and bond sectors on a frequent basis. 

The S&P 500 Index is a market-capitalization weighted stock market index of 500 widely held large-cap stocks often used as a proxy for the U.S. stock market.  

The Russell 2000 and 3000 indices are market-capitalization weighted stock market indices that include, respectively, 2000 and 3000 of the most widely-held stocks and are often used as proxies for the U.S. stock market. 

The Nasdaq Composite Index is a market-weight capitalization index that covers more than 3,000 stocks listed on the Nasdaq Stock Market. What is the Nasdaq Composite, and What Companies are in It? | Nasdaq