Navigating the Coronavirus Recession

The last several weeks have been difficult for America and countries across the Globe. Quarantines, business closures, and social distancing measures have shutdown economies worldwide. This has expanded concerns from the health threat of the virus and loaded economic concerns on top. As a result of the measures taken, the United States and the Global economy have plunged into a recession and the U.S. stock market has seen the sharpest and quickest decline in its history.  …

Booking Profits and Identifying Opportunities

The combination of the Presidential Election process and the Coronavirus is creating a volatile mix for investment markets—with 1,000-point swings in the Dow Jones Industrial Average becoming a frequent occurrence. As you know, over the last year we built an out-sized position in gold to hedge your portfolios. This gold position did its job when markets pulled back.  On Friday, we took advantage of this volatility by booking some profits and reducing our gold position …

Gold Is Doing Its Job

As you know, we have a significant position in gold in your portfolios.  We did this as a counterbalance to market volatility.  Gold serves as a store of value and a safe haven to investors during periods of volatility.  With concerns of the Coronavirus increasing, investors are stampeding to safe haven assets causing gold to hit multi year highs.

We purchased gold as a hedge to global issues and it is working.

On a day …

Changing Things Up

At Riggs, we have always prided ourselves on our risk management, contrarian approach.  In June, 2016 when the entire world expected Brexit to be voted down, we put gold in your portfolios as a contrarian investment to offset market volatility should Brexit pass.  Brexit passed and gold popped.  We did something similar in November of that year for the U.S. Presidential election.  It is that willingness to view the markets from a risk-management perspective that has allowed …

VOLATILITY HAS RETURNED

After the 2018 fourth‐quarter meltdown, the stock market returned to its low volatility ways. There were 87 trading days since the last 3% correction. Not only was the current stretch abnormal from a duration perspective, it was unusual coming off a low. Perhaps it was the Federal Reserve “Pivot” that lulled the market into complacency. In January, the Federal Reserve made an unexpected 180 degree policy change from increasing interest rates and signaling the end of its …

In our July, 2018 Riggs’ Report “Removing the Punch Bowl—A Sign of Good Growth but a Tricky Business,” we stated:

…perhaps more important to the investment markets is how skillfully the Federal Reserve manages their quantitative tightening program.  The actions of the Federal Reserve and the uncertainty around the trade negotiations could spook the investment markets and so we want to tread carefully right now.  With that as the backdrop, we are also heading into a seasonally weak …

“The Federal Reserve…is in the position of the chaperone who has ordered the punch bowl removed just when the party was really warming up.” 

Federal Reserve Chair William McChesney Marting, Jr., October, 1955.

It was a choppy ride in the investment markets for the first six months of the year.  The Federal Reserve continued its path of quantitative tightening by raising its policy rate for a second time this year and projected two more hikes in 2018.  The Tax Relief …

The first quarter of 2018 started with a bang as January proved to be a strong month providing a continuation of last year’s rally. Since then, the stock market has faded and volatility has returned.  The return of volatility is especially pungent given that 2017 had the lowest stock market volatility in history.  We see this as a return to normal and healthy market conditions. It is worth noting, that since 1950 there have only been 12 previous years with …

2017 was an excellent year for the investment markets and the global economy.  We saw acceleration of economic growth in the U.S. and abroad which led to increased global trade.  Companies have been beating their estimated earnings projections; and as a result, U.S. equity markets went on a tear.  With such a strong year, the question on everyone’s mind is “can 2018 keep up?”

Looking forward, we see further improvements in economic growth.  Our research indicates that the U.S. could …

The US and global economies are doing well. Here in the U.S., natural disasters such as hurricanes and fires seem to have had little or no effect on economic growth. The European Union is experiencing their best economic expansion in years and Japan is experiencing their best growth since the 1990’s. In fact, the majority of the world’s economies seem to be doing quite well. The markets are in a unique place where the confluence of improving global growth and …