Two Steps Forward, One Step Back. Growth Is Not Linear.
Growth Isn’t Always Linear: Two Steps Forward, One Step Back. Two steps forward and one step back suggests that we don’t need to worry that setbacks indicate something wrong, so long as we are making progress overall. This could be the theme for 2023; it is so far.
Our research has confirmed that many women hold too much cash in their portfolios. Recently, we have invested excess cash into Treasury bonds and bills to earn annualized returns in excess of 4.5%. These bonds are very safe and we can easily map the cash flows they will pay.
We would like to highlight the behavior of Treasury bond investments made recently. Bonds trade daily and interest rates change throughout the day as well, so that means the market value of a bond will change daily as well. However, the bonds have been purchased with the goal to hold them until maturity over the next 3-6 months. The short-term price changes due to changing interest rates are just volatility with very little bearing on the actual total return an investor experiences by holding the bonds until maturity.
As a rocky February ends, we look to clues for seasonality data over the coming months. Historically, March is a seasonally strong month, although that has not been the case in recent years. March has been the fourth strongest month as measured by the percentage of positive S&P 500 Index monthly returns since 1950. A solid 60% of March monthly returns have been positive over the past 5-, 10- and 20-year periods.
Even more encouraging, though, is the March/April two-month period has been the second strongest (only behind November/December) since 1950 and the strongest over the past 20 years.
Investment Philosophy. We look at risk and return both strategically and protectively. Strategically, through good offense, by combining different asset classes we create an allocation with great prospects for delivering the growth you seek while guarding against unnecessary risk. Protectively, through great defense, we incorporate data to flexibly respond to market information and to help guard against losses. Thank you for your continued loyalty.