Blog

Supportive of Cutting Rates In 2024?

By know our readers know that August and September are historically less-than-optimal times for investors. Illustrating this again, per our friends at MAPsignals, these two months are the worst of the year for stocks: As expected, the...

Volatility Will Pass as The End of The Year Continues to Hold Promise

We’ve hit the midpoint of quarterly earnings season, so it’s a good time to reflect on what’s occurred thus far. For the S&P 500*, the number of companies reporting positive earnings surprises beats recent averages,...

The Winning Data-Based Move Right Now Is to Do Nothing

Going into last week’s Federal Reserve Federal Open Market Committee (FOMC) meeting, we expected some stock market volatility that would depend on the Fed’s language, not necessarily the baked in 25-basis-point increase....

The Patterns Are Clear

Sometimes patterns can suddenly appear, defying logic. Of course, human error can often take command too, leading us to think we see patterns that don’t really exist. That can make life tricky for an investor, and that’s...

The Macro Landscape Looks Solidly Bullish

It’s often difficult to distinguish signals from noise in life – it’s especially true for investors. To remedy the issue, we at Cornerstone turn to objective data. Many others listen to the noise caused by the media...

Midyear Recap, Updating Our Year-End Target

Hindsight reviews tend to expose pivotal market moments, enabling us to learn more. Looking at 2023, the S&P 500* ended the last quarter (and the first half of the year) on a 14-month high as most major stock indices logged solid gains...

Skate To Where the Puck Is Going

Optimism has been in ample supply lately. Even the financial media has started jumped on the bull train!It’s understandable – as of June 16, the S&P 500* is up roughly 15% so far this year (not including dividends) and up...

Another Argument for Staying Invested

We mentioned last week how the stock market is finally starting to broaden out. Leaders outside artificial intelligence and huge tech companies are emerging. The rally has led the S&P 500* to its next resistance level at 4,300.Since...

Early Evidence of a Broadening Market

We investors might think we’re in the story “Alexander and the Terrible, Horrible, No Good, Very Bad Day,” where nothing goes right. Gloom from the anticipated recession is casting a long shadow (even though the...

Inflection Point and the AI Revolution

People are holding their breath right now, waiting for the “next thing” to happen. Most are focused on the debt ceiling or the new (and ever-present) hype around artificial intelligence.The current consensus is positive....

The Debt Ceiling and a Political Circus

Around Memorial Day, reflection seems natural. We first want to thank those who’ve fallen in service to the U.S., as well as their families. We also want to show appreciation for all who’ve served the country. What we do...

Trying To Feel Safe Can Be Costly

Nothing happens in a vacuum. It’s been proven again that when interest rates rise, things break.Perhaps that’s why there’s been a shift in the Federal Reserve’s worry, from inflation to the stability of the...

Earnings Recap and What Lies Ahead

At this late stage of the 2023 first quarter earnings season, it's time to start moving forward to what lies beyond those reports. But first, it's worthwhile to look at the numbers. According to FactSet, S&P 500 companies are recording...

Things Aren’t Always as They Seem

Sifting through distracting narratives can be fun. However, facts and data are often absent. In other words, things aren’t always as they seem.For instance, investors have basically been downtrodden since October 2022. Perhaps...

We’re At a Fork in The Road

In the first three weeks of April, the S&P 500 stayed within a 100-point trading range (i.e., 4,050 to 4,150), which caused choppiness and a sideways market. The number of conflicting data points, adjustments in earnings guidance, and...

Follow the Money

We’re nearing the heart of earnings season. This is when investors “follow the money” on first quarter corporate earnings and revenue reports, along with corporate guidance for future quarters. Of course, everything...

What Markets Know and What They Don’t (Yet)

Last week we said there was a transition happening and briefly discussed what to expect in the second quarter. Now we’re starting earnings season, which will be led by the money center banks (how appropriate), and we at...

The Question of The Second Quarter in A Nutshell

With the last quarter now in the rearview mirror, we want to touch on some of its high points and look to the second quarter of 2023. All in all, it was an odd quarter, but one that we survived intact.Even with the craziness, the S&P...

Transition in Market Thinking

It’s the first trading day of a new quarter and we’ve been researching. We recently completed our systematic quarterly rebalance and shift in allocation. But wouldn’t it be nice if there was an early detection system...

Is Anyone Listening?

We’ve written about the Fed and financial sector fallout a lot recently. Today we want to focus on the market and the ripple effects under the surface from a fundamental and technical momentum standpoint.Broadly viewed, the...

Now Something is Broken

After the somewhat stunning banking events of the past week, it’s time to turn the focus to the Federal Reserve, Chairman Jerome Powell, and the interest rate decision later this week. If there isn’t a pause now, or...

Silicon Valley Bank Fallout

Things you need to know from over the weekend:The Federal Reserve (FED) allowed Silicon Valley Bank (SVB) to FAIL while simultaneously rescuing Depositors – This was NOT a bailout nor should it have been.Signature Bank (NY) is...

Quality is the Volatility Remedy

Not long ago we said we would be closely watching the M2 measure of money supply, specifically awaiting data related to January. Well, the report is in. As expected, the total amount of M2 money in the U.S. financial system is falling...

Higher Highs and Higher Lows

January brought an unexpected jump in markets. February saw consolidation as bears and bulls battled. Now, we want to reflect on data with forward-looking eyes, ears, and minds for March and April, which historically are two of the...

Different Than Anything in The First 200 Years of America’s Existence

It’s nearly impossible to absorb financial news recently without a heavy dose of speculation about what the Federal Reserve is or isn’t going to do with short-term interest rates, what that means to markets, and blah blah...

Cornerstone Foundations: Longevity Risk

Editorial note: this post is part of the Cornerstone Foundations series that explains our firm’s philosophical thinking on matters of critical importance to retirement savers and retirees alike.At Cornerstone we often talk about...

While Bulls and Bears Battle, Data Shows the Score

Bond and equities markets are in a much better place so far this year than throughout 2022. We’re seeing more evidence of inflation slowing and it’s providing a launching point for bulls to run.Aside from the recent...

Was January Real? The Next Two Weeks Will Be Telling

Even with markets opening 2023 on a tear, many questions remain unanswered amidst mixed economic data and earnings reported so far. However, when taken together, the entire package is being bought by investors as a “soft...

Contrarian Bullishness

Last week we painted a rather rosy 2023 picture. But we’re also aware how central banks, economic data, and market forces are colliding right now. So, today we want to clarify the situation using more recent data to explain this...

Recent Data Reflect a Shifting Undercurrent

We’ve mentioned before how typically the end of a year and the beginning of the next can bring light investor action and data, which makes prognosticating tougher. Well, we’re now far along enough in 2023 to have...

More Love for Dividends and More Evidence for Patience

We’re in 2023’s infancy, and as we said last week, a change in the calendar doesn’t mean the investing environment or strategy changes. As CFS clients and blog readers know, we have a philosophy of believing in the...

The End of 2022 Informs 2023 and Beyond

Prognosticating is never easy. Remember when we said making predictions for 2023 is extraordinarily difficult? We meant it.Thankfully, there’s no harm in making predictions because they tend to have a positive selection bias...

2022 in Seven Charts (and one for 2023)

In this final post of 2022, we want to wrap up some of the biggest stories of the year. Here are seven charts that we think encapsulate 2022, then one that points a way forward for markets next year. Without further ado, let’s...

2023 Outlook: Strong Belief in Corporate America

Happy New Year! Welcome to 2023! Our attempts to predict stock values for this year are more difficult than normal because ripple effects from the unprecedented COVID-19 relief efforts still leave a wide range of possible outcomes. Our...

Big Volumes Move Markets; Glance Towards 2023

The market has been a whirlwind for a while, with volatility the norm as sectors rotate and range-bound trading remains prevalent. A microcosm of the entire year is what’s occurred since December began. Stocks have jumped and...

Data Beats Bias

As we continue to wind down 2022, we can feel how investor tensions are still quite high from a year fraught with war, partisan politics, and economic worries. Fears of a looming “recession” have impacted stock prices much...

Markets Stay Sideways As Consumers Spend Big (Maybe Too Big)

There’s no masking how this has been a volatile, indigestion-inducing year for investors. Our readers know our current thesis calls for volatile, range-bound trading, which is a continuation of 2022’s established pattern...

Inflation Down, Stocks Up, But the Fog Remains

In our current range-bound trading environment, the market has been on the lookout for any reason to go up. Well, it found a new one in the latest consumer price index print that caused stocks to skyrocket on news of a...

Fed’s Expectations vs. Reality, and What it Means for Markets

With the Federal Reserve’s most recent minutes out and the dust having settled from Fed Chair Jerome Powell's press conference, we think it's important to touch on what it all means. We especially want to focus on expectations...

Identifying True Value Amid Chaos and Noise

We’ve written in the past how bond markets have been controlling the equities markets. Within this current range-bound trading environment, bonds are the tail that wags the equity dog.So, it shouldn’t be surprising that...

Don’t Buy the Fear Cloaked in Advice

It’s Halloween, but that doesn’t mean investors need to be scared, despite what’s on TV.See, as earnings season has been kicking into high gear, we’ve noticed many TV pundits advising investors to sell into...

A Silver Lining Among the Oddities

This blog has covered some technical topics lately. We’ve mentioned winning in range-bound markets,  covered Federal Reserve policy ramifications, and used data to show budding normalization across the economy. We also laid...

Data Telling Truths on Recession, Earnings, and Normalcy

The last couple weeks we’ve talked about winning at the margins and identifying areas of hope. We now want to turn our attention to data to understand the landscape better as the third quarter earnings season is kicking off...

Policy, Relief Rallies Cause Anxiety, But There is Hope

Readers know that last week we put a microscope on the importance of the 10-year Treasury note when it comes to markets. We then saw that concept in action basically right after that blog post published.At the end of September, we saw...

Win at the Margins

Since we began this blog, our clients and readers have known that we’ve remained bullish. Whether it was the Greek debt downfall, Brexit, elections, or anything else, we’ve maintained a positive stance, especially when it...

Policy Shift Negates Inflation Fix, Yet There is Hope

Many of our readers will think we’re beating a dead horse talking about the Federal Reserve, interest rates, inflation, markets, the economy, and so on. But we still hear neighing – the horse is still very much alive...

Weeks Like Those Cause Re-Evaluations

We had a different topic ready to go for this post, but last Tuesday’s Consumer Price Index (CPI) report forced us to change course quickly. The common inflation measure dropped less than expected, indicating more will need to be...

Housing is the Next Inflated Bubble to Burst

Markets have continued to consolidate in September, as we suspected they would, which has created significant volatility. The theme of red prevailing in markets is holding true at the moment (albeit there was a nice reprieve late last...

Consolidation, Summer’s Broad Buying, and the Rest of 2022

After weeks of significant “big money” buying, we recently saw some market consolidation play out (as expected) in the “big money” buy and sell signals from our friends at MAPsignals. During a volatile week, the...

Cornerstone Foundations: Portfolio Diversification and Sequence of Returns

Editorial note: this post is part of the Cornerstone Foundations series that explains our firm’s philosophical thinking on matters of critical importance to retirement savers and retirees alike.Market and economic data are...

Earnings Better Than Feared and How Imbalance Swings Markets

As earnings season ends, incoming data is slowing significantly. We mentioned weeks ago how important the upcoming data would be to determine which way markets would go. So now we want to take time to briefly review the landscape now...

A More Bullish Outlook May Be in Order

With earnings season coming to an end soon, last week we received important datapoints for this quarter in the form of the most recent consumer and producer inflation reports. Readers know that in the beginning of July we stated that...

Earnings Bring Investor Comfort, Confidence

If you pay attention to the news, you’ve surely heard about “cracks in the economy,” hiring freezes, inflation, and more. So, things must be pretty bad. Well, don’t forget that negativity draws attention, and...

Current Positive Data Trends are Bullish

Last week the first estimate of second quarter gross domestic product (GDP) showed the economy is estimated to be contracting at an annualized rate of 0.9%. But no matter which way the initial estimate ends up in reality, it seems...

A Stabilization in Sight?

It may be tough to believe, but we’ve begun to see some positive market action and favorable economic news (contrary to popular belief). In what’s perhaps just an interesting coincidence, this all coincides with the trusty...

We May Be Seeing Signs of Lifting Uncertainty

Last week we talked about the macro-level outlook for markets and the economy, focusing on how important this earnings season would prove to be. Now we'll dig a bit deeper to explain today's markets and what to expect for the rest of...

Earnings Will Decide Which Path We Take

This time of year, there is a typical slowing of the news and data streams. So, we want to take a step back and highlight what we’re looking for as earnings season unfolds once again.We’re just past the halfway point of the...

Dividend Strength Revisited and Potentially Cooling Inflation

Our clients and readers know how Cornerstone as a firm believes in the power of dividends, especially stocks of companies that grow their dividends. This philosophical belief in dividends became even more important going back to last...

Contrarian and Capitulation

Markets are cyclical. At any given point in time, we’re somewhere on the spectrum between full growth and full capital retreat. And when markets are bearish, investors are always wondering where the bottom may lie.When selling...

As Inflation Rises, Fed Credibility Crumbles

Grab some water. This post may be a bit dry for some. But it covers one of the most pressing topics today – inflation.Last week all eyes were on the results of the Federal Reserve meeting to see how much the central bank would...

Why We Follow “Big Money” Data

Today’s post will take a little bit of a different approach than discussing weekly market or economic updates because of the recent extreme market action. While perhaps unnerving, it’s provided us datapoints for important...

After Oversold Blip, Markets’ Path Still Coin Flip

Our readers know how we often cite the Big Money Index (BMI) from our friends at MAPsignals. It’s a datapoint that tracks “big money” investment activity via a 25-day moving average of buys and sells. Well, it...

Oversold Markets, Unwinding Leverage, and Buffett’s Buying

Last week, the trusty Big Money Index from MAPsignals, which tracks “big money” investor activity, finally reached the oversold territory we’ve mentioned for weeks. It’s the first time we reached oversold since...

A Bullish Future after a Bearish Present; Highlighting Energy’s Long Runway

Changing Landscape, Altered Forecast

Understanding Value and that Cash is NOT King

The Required “Positivity Premium” and How to Navigate Rising Rates

Surprising Consumer Data Support Growth

Market Plays Defense as Rising Rates Blast Bonds

Stick With What Works Until It Doesn’t

A Bipolar Month

Let’s Talk About the Economic “R” Word

The Ides of March, Again and Again

Making Sense of the 2022 Investor Experience (So Far)

The Fog of War and Its Effect on Markets

The State of Equities and the Power of Dividends

Where to Turn When Volatility, Uncertainty Arise

Unfolding 2022 Yields a New Playbook

Landing Softly

Emerging from Irrationality Intact

Top 6 Fintech Trends to Watch for in 2022 (& Beyond)

Breaking “Rules of Thumb”: The 60/40 Portfolio Allocation

Compounding Factors Point to Growth

How Mobility is Transforming Financial Services?

Final 2021 Thoughts and Our Belief in 2022

Welcome to 2022

More 2022 Projections, Next Year’s Potential Value, and Staying Consistent

A 2022 Projection and How We Got There

Fear, Volatility, and Opportunity

Volatile Catalysts Shake Markets, But Data Remain Strong

Since the day after Thanksgiving, we've seen significant selling take place in global markets as prices flushed out fast. In this post we want to highlight two catalysts for that volatility, then provide perspective on what it means...

The Rush to Quality

We expected some market consolidation after earnings season. It’s a fairly typical occurrence. And last week in the shortened holiday trading week, that consolidation arrived and was exacerbated even a little bit more (writers...

Seeking Opportunities When Inflation is Everywhere

Inflation isn’t going away, at least not soon. Recent data show consumer prices rose 0.9% in October which means 6.2% over the last year. As a result, real inflation-adjusted average hourly wages continued their trend downward...

Broad Buying and Bridge Building

In last week’s post bidding farewell to the 4% Rule, we said we’d focus this week more on market data as earnings season drew to a close, including how that information would affect markets for the remainder of 2021. Well,...

Goodbye 4% Withdrawal Rule (Plus a Quick Market Update)

Earlier this year we discussed Cornerstone’s philosophy on goals-based planning and how our Road Map 360 process applies those concepts. In that post, we mentioned some (in our opinion) outdated rules of thumb in retirement...

Strong Quarter Precedes Uncertain 2022, Though Opportunities Persist

Market data are firming up and it’s being reflected in the trusty Big Money Index (BMI) from MAPsignals. The BMI is ramping up to a prior high point of around 60%. We're seeing quality stocks being purchased, and last week was a...

Household Wealth, Spending Lifting Markets (And More Could Follow)

Our readers know how growth stocks have been especially mired in the mud for months. We can thank a lack of economic data and an endless stream of bad news on TV. That all put pressure on great stocks throughout September. But, as...

It’s the Economy, Stupid

We’re heading into earnings season (as of this writing JP Morgan announced profits and Blackrock kicked it off with blowout quarters). Per usual, news is negative and it’s easy to worry about markets and stocks because...

Guest Topic -Top Financial Tips For Property Investors

Top Financial Tips For Property Investors Investing in real estate can be a good way to protect and grow their capital, investment real estate is not without its risks. New property investors have plenty of opportunities to make...

The Growth Season and Energy’s Upcoming Transition

The market gyrations continue. One day growth stocks are bought, and value stocks sold. The next day, it’s the opposite. Today we want to address what’s taking place under the surface of big market index activity and what...

Fed Finally Arrives to Party; A 1-2 Inflation Hedge Combo

For those who don’t know, about a week and a half ago the Federal Reserve forecasted plenty of changes to the outlook for monetary policy in the next few years. If we’re being honest, the Fed finally boarded the train with...

Fearful Headlines, Big Buying, and More China Risk

Last Monday markets saw red. There was a significant daily pullback in the big indexes, creating a media storm. But readers should have been prepared, as we’ve discussed the possibility of September volatility as well as the...

A Solution for When Data Conflict

Earlier this year, we raised our forecast for the S&P 500 (the market). What you may not know is, behind the scenes, we've also lowered our internal forecast for real gross domestic product (GDP) growth throughout the year (the...

Our Water Infrastructure Thesis and How Revenues Boost Earnings

We've spent some time talking about infrastructure-related investment themes and the opportunities that lie within. This theme has become more popular than even we anticipated, as 2021 inflows into infrastructure exchange traded funds...

The Futility of Market Timing (Plus Another Income Alternative)

Following up on last week's quick MAPsignals Big Money Index (BMI) update, we said we wanted to see more data. Well, the data surprised to the upside in a huge way. Stocks are being purchased at breakneck speeds again, while selling...

Planning for Today’s Retirement Needs

There are many theories and philosophies around retirement planning. Of course, as the economy and markets have changed, so have the theories and philosophies. But at the end of the day, they all work toward the same thing – a...

Less Buying, More Selling, and an Awaiting Metaverse

Our readers know how the “big money” has been acting over the past few weeks. Using one of our favorite data points – MAPSignals’ Big Money Index (BMI) – we can see a comprehensive view of institutional...

A Washing Machine Summer

Summer markets are like washing machines in that there are different phases, and they churn a lot. That’s especially true of 2021 so far. Photo by Dejan Krsmanovic, licensed under Creative Commons License 2.0 © 2019 As we...

Summer Lulls, Corporate Strength, and Our Take on Sustainable Investing

The “dog days” are here and it’s created a bit of a lull in the market. It’s expected for this time of year, but investors can take solace in the fact that history suggests things will pick up near the end of...

Data-Driven Faith Beats Fear; A Changing China Outlook

Big selloffs often act as reset buttons for the market. Our readers know how the trusty Big Money Index (BMI) from MAPSignals tracks institutional investor activity – they also know the BMI fell hard. However, current data...

Explaining These Dog Days of Summer

Recently we spoke about traditional summer volatility. Well, right on cue, the sellers are finally here. Unsurprisingly, the trusty Big Money Index (BMI), which measures institutional investors activity (i.e., “big money), is...

Inflation Math, Federal Reserve Differ as Profits Grow

Inflation. It’s on the rise and on everyone’s minds. It’s been on ours for a while too. We follow inflation closely because it could be a big risk on investment portfolios, retirement income, and spending power....

Bulls May Still Have Room to Roam

There is growing evidence that the market is fearless right now. There hasn't been a 5% correction in the S&P 500 since before the presidential election. And recently, the index set seven record highs in a row, which is the longest...

Mid-Year Review and Second Half Outlook

We just completed 2021’s second quarter and have reached the midway point of the year. Speaking strictly from an investor standpoint, it’s been a hell of a ride, a hell of a quarter, and a hell of a six months. In review,...

Inflation Worries Fizzle While Dividends, Buybacks Return

Our readers know we’ve discussed inflation and its risk over time to equity markets. We’ve also covered strategies to mitigate this risk. Importantly, our analysis on all these topics centers on data – we only care...

Data Keep Getting Stronger

It’s no secret that we don't value the news too much. It seems to only kick up a hornets’ nest. And often, it’s just flat-out wrong. Even more eye-raising is how we’re not alone. A recent poll asking about...

A Summer of Growth

At times, I'm sure some of our readers have felt like they were being held hostage when investing. It's not always smooth sailing. Some days it seems like your stocks are “red,” while everything else is “green.”...

Legacy Tech’s Yield, Timeless Lessons, and a “Big Money” Bounce

As we continue our theme of generating income in today’s market, it’s important to recognize how investors have been inundated with a stream of “hot tech fads” in the financial news. Stories often tell of a new...

Generating “Green” Income Amid a Growth Bounce

Sometimes waiting for stocks to move feels like standing in an endless line. But many investors, me included, want to know when the technology/growth sell-off will finish. The November presidential election kind of felt like a reset....

Volatility Shows Change is the Only Constant

Psychologically, humans tend to want permanence – something to set and forget. But life (and the market) sometimes has other plans. Recently we saw market data disintegrating, thus creating volatility. And then along came a...

New Fears Attacking Market – Should We Be Scared?

When it comes to stocks, everyone who follows the market knows it has rotated bigly (sorry, couldn’t resist!) over recent couple of months, and the past week was no exception. Stocks were wild and weird, especially since...

Forecasting the Next “100 Days” and More

The media loves to talk about a president’s first 100 days in office probably more than needed. But in the spirit of that benchmark, and with President Biden’s first 100 days in office just ending on April 30, the question...

The Great Inflation Hedge

All good things must come to an end. In this case, we're talking about low inflation. While we think the odds of hyperinflation are fairly low, a return to normalized inflation rates definitely seems to be on the horizon. This is...

Stocks’ Spring Rise in Sight

As a country, many of us are anticipating the COVID-19 pandemic’s end. We're ready to travel, dine out, see movies, and hang out with friends. Some places already act as if the pandemic is over. Of course, it’s not. Cases...

“Big Money” History Can Inform Today’s Decisions

I suspect if you asked the average investor about their investments, most wouldn't have much of a clue as to the risk, the concentration, or maybe even the actual holdings within their portfolios. This makes them passengers, which...

The Inception of an Economic Supercharger

One quarter down with three to go and it’s clear some things have changed. The first quarter closed with the Dow Jones Industrial Average leading the major market indexes (for a change) with a 7.76-percent gain versus 5.77...

Markets and Taxes Likely to Rise

Buckle in folks because it’s time for a post on everyone’s favorite topic – taxes! I know this subject is right up there with root canals and rush hour traffic, but with a new administration running the show in...

Tech Wreck? Not So Fast

[Editorial note: this post cites the Invesco QQQ Trust (QQQ) exchange traded fund as a benchmark for technology investments because it’s a good reflection of the entire technology sector and offers the editorial convenience of a...

March Market Madness

This is usually the time of year when college basketball takes center stage. The best teams in the nation compete in a championship tournament where one loss means a ticket home – may the best team win. Over the years, the...

Do Not Fear the Normalness of Markets

In prehistoric times, fear was mandatory. It kept you alive. But today, it’s different. If you have too little fear, you become dangerously daring; with too much, you’ll never progress. This concept can be applied to the...

Rebalancing Reframed (and the Big Money Index Update)

With the end of the first quarter less than a month away, I’m departing slightly from the usual blog format to provide an educational refresher on portfolio rebalancing. This strategy is especially important now since many...

Unintended “Overstimulation” and Ways to Generate Retirement Income

Things are looking up for the U.S. economy. The update on real gross domestic product (GDP) growth last week showed a 4.1 percent annualized jump in last year’s fourth quarter GDP, which is in line with our estimate of 4.3...

The Ongoing Tale of Bitcoin and the Bull Run

Recently we’ve written a lot about MAPsignals’ Big Money Index (BMI), which tracks institutional investing, and how it shows the market is overbought. Such a situation implies a downward correction is due, and we...

Commodity Prices Signal Inflation While Stocks Remain Overbought

Everyone is talking about the stock market hitting new highs. But there is another bull market beginning to pick up momentum only a few weeks into 2021 – commodities. This earnings season, many of the earnings calls we’ve...

Investor Battle Forges Unlikely Agreement as “Big Money” Exits

The COVID-19 pandemic has produced an array of…let’s call them “bizarre” experiences so far. But here at Cornerstone, we must say that seeing millions of young investors taking part in a real-time short squeeze...

Tackling the Yield Challenge, and When Is the Reset?

We at Cornerstone have discussed low interest rates from a macro viewpoint periodically, but today we want to touch on the real-life applications of what that means for retirees seeking income from their investments. Simply put,...

Avoiding the Double-Dip and Seeking Opportunity

Let’s start with some good news – the double dip recession so many feared in the fourth quarter of 2020 didn't occur, and it doesn't look like it will happen in 2021 either. Yes, renewed shutdowns starting in November...

Clearer Picture Emerging on Taxes, Markets

The seemingly endless election of 2020 is finally over, resulting in President-elect Joseph Biden and slender Democratic majorities in the House of Representatives and Senate. These thin blue margins will limit many of the more...

Buying Brings Growth, Inflation Risk

I was going to start this post discussing how not much has happened because of the holiday season and new year. Markets were closed, many people were off work, no new economic or market data were released, and so on. Then damage and...

Market Overheated? Perhaps it’s Just Simmering

With our first post of the year, we want to address a question that’s in the news (we’re frequently asked it too) – in 2021, how will the market hold up, based on projected corporate earnings and revenue? This very...

A Holiday Miracle

In Cornerstone’s last post of what has been a wild year, let's start off positively with what can only be described as a holiday miracle. The Federal Open Market Committee (FOMC), which sets interest rates, released its third in...

Progress, Perils, and Potential Pachyderms

Before continuing the theme of what we’re expecting and analyzing in 2021, let’s first recap the very recent past, which has been rather incredible. We saw new all-time highs in the S&P 500 (higher than 3,700), deliveries...

Economy, Markets Eyeing Recession Exit?

The COVID-19 recession is by far the weirdest one we've ever experienced. There's no way anyone could've forecasted the effects. The recession wasn't caused by the Federal Reserve being too tight. It wasn't caused by the trade war with...

Record November Could Precede “Santa Rally,” Bullish 2021

Reviewing where we’re at today, the market has told us that the nightmare of 2020 is almost over. The major forward-looking indexes delivered all-time highs the morning after Thanksgiving Day: For some perspective,...

“Big Money” Buys Everything; Two More 2021 Investment Themes

In the wake of the 2020 election, several COVID-19 vaccine announcements caused the stock market to jump, with no equity seemingly being spared – everything went up. But as we discussed last week, a pattern started to emerge as...

Market Rotation, Buying Continue – Plus, Two 2021 Investment Ideas

For all that’s happened so far in 2020, the market is up. There are several reasons, but here are five of the biggest, in Cornerstone’s opinion: The S&P 500 includes many large tech companies that we could not have lived...

2020 Could End Well – Seriously

Leading up to the election, many pundits predicted continued market unrest and volatility. They said the storms were coming, and it was going to be an ugly, wild ride. Now that we have hindsight, how did that prediction work out? About...

The Pricing in of Gridlock and What’s Next

As we sit today, it appears there is no red or blue wave crashing down. Instead, we (thankfully) have an established system of checks and balances between the executive and legislative branches. Not missing a beat, the market began to...

Staying Fully Invested Wins Every Election

It’s our last post before Election Day, and the best news I can give you is tomorrow it will all be over (hopefully). The second-best news we can give you is “stocks typically climb, regardless of who's in the White House...

Investor Confidence Brewing, Despite Volatility

We've spent the last couple months discussing what to expect from markets pre-election and once there’s an official result. Now it’s time to bring this plane in for a landing (despite the absence of regular air travel). For...

The Market vs. Economy Conflict Continues

The seemingly ongoing conflict between market and economic data rolls on. In the first full week of October, the S&P 500 gained 3.84 percent, the Nasdaq composite gained 4.46 percent, the Dow Jones Industrial Average gained 3.3 percent...

Mixed Signals May Indicate a Stalled Recovery Ahead

Investors are probably glad September is over, as it delivered its typical down performance, with the market falling 3.52 percent. While October entered with a bang, it wasn’t without drama, be it from an unconventional first...

Gearing Up for the Fourth Quarter

We’re now in the fourth quarter of a wild year. And considering some recent events, it’s more important than ever to rely on data, not the television pundits Last week marked the end of a dismal market month, the...

Uncertainty? Certainly.

In recent posts we’ve covered how taxes and regulations in a potentially changing political environment could affect investors. They could change drastically, and they’re just two of many important factors that will...

Market Rotates as Economy Readies for Growth

During the COVID-19 economy we’ve been providing economic- and market-related updates in every post. Typically, the economy leads off. However, this week we’re going to start with market updates because, after the last...

The Coiled Spring Effect

We’ve spread our wings a bit lately in terms of blog topics, talking about taxes, regulations, and politics in general as the election nears. They’re important discussions, to be sure. We’ll continue them in the...

Is this Normal?

We’ve analyzed in recent posts about how the market might be affected by different political scenarios. Taxes and regulations are important issues that drive (or hinder) economic growth. And in the future, we’ll cover more...

Election Could Be a Regulatory Turning Point

Like last week, we’re going to continue analyzing what a political shift on the federal level could mean for investors. In this analysis, facts guide us, and objectivity is the sole mission. Like many other people, we’re...

How a “Blue Wave” May Affect Taxes, Investing

With the election about 10 weeks away, many of our upcoming posts will use a fact-based lens to examine how changes in the federal government could affect policy. We’ll start today with taxes because they could impact our...

How We Really Stack Up on COVID-19, Economics

At Cornerstone, we’re often asked about the “disconnect” between the performance of the stock market and the never-ending news about how bad the U.S. is botching its COVID-19 response. When peeling back the data, a...

Rapid Tech Advances Leading the Way

In 2020, digital networks have been our lifelines. We’ve used them for commerce, communicating with loved ones, and so much more in our daily lives. Our memories are short though. We forget how daily-use technologies like...

Moving on From a Brutal Quarter

Our faithful readers know two measures always on our economic dashboard – high frequency data and COVID-19 infections. These data provide insight into two key components to our recovery – wide-ranging economic activity,...

Potential Risks Loom in Not-Too-Distant Future

As markets start to stabilize and move sideways, we at Cornerstone want to take time to expand our analysis to look forward. Specifically, we want to discuss the types of market risks that will affect short- and intermediate-term...

Looking Back and Forward on an Erratic 2020

The past few months we’ve been examining the economy and markets as COVID-19 recovery takes hold. We’ll continue that analysis while also stepping back for a mid-year review and sharing our outlook for the rest of 2020....

Consumers Save, Slash Debt as Earnings Season Approaches

At first, scientists told us we needed 15 days to slow the spread of the coronavirus, the virus that causes COVID-19. The medical experts have consistently lengthened this timeline, leading governments to shut down economic activity in...

Economic Awakenings Coincide with Market Opportunities

New COVID-19 cases have created uncertainty from an economic standpoint. As a result, investors are leery. Not surprisingly, markets fell recently – but not because of the virus. It was because of the fear of more...

Savers Flush with Cash, Stock Buyers Dash

This week we again examine what’s happening economically and in markets amidst our new COVID-19 reality. There is good news on the personal savings front. What happens going forward in that regard will be telling. As for markets,...

Sales, Stock Swings Reveal State of Recovery

Bearish investors received a reprieve on June 11, as markets seemingly fell off a cliff. But since then, markets have recovered well, preserving the technical threshold of around 3,000 for the S&P 500 and 9,500 for the Nasdaq composite...

Economy Improves While Market Flexes Buying Muscle

This week we continue to look at the economic and market situations in the U.S. Even though we’re in unprecedented times where nothing seems to shock, some recent data opened eyes everywhere. Welcome Economic Surprises The May...

What “Should Be” Differs from Real Data

This week we again look at the current paths of Main Street and Wall Street. In general, progress appears to be taking hold. Still, we’re in early days. But we like what we see thus far, and given what’s happened over the...

The Diverging Paths of Wall Street and Main Street

Right now, it seems there two rather stark American realities. The one investors are experiencing is prosperous and promising. The one felt by millions of American workers is fraught with economic loss and vast uncertainty. This post...

The COVID-19 Economy’s Rising Momentum (and Debt)

As another week passes in the COVID-19 economy, we remain pretty much in limbo. That said, there are some welcome signs – economies reopening, investors diversifying, and the like – though there are reasons for caution too....

Looking Under the Hood

The range of plausible 2020 economic outcomes is wide right now. Key factors on our ultimate fate include measures that don’t normally drive economies. As we’ve discussed, it’s the spread of COVID-19, how fast the...

Jobs, Markets, and Our Bullish Outlook

There is more data, but also steady uncertainty. States “reopen,” but business remains slow. Markets gain and lose, but overall activity is mild, plotting no major course yet in our recovery. And thus, we remain in COVID-19...

Deciphering the Great Economic Recovery Unknown

According to data released last week, U.S. real gross domestic product for the first quarter of this year was down 4.8 percent, which blew away the 3.9 percent estimated decline. We’re now in the second quarter of the year, and...

Fed Buying Frenzy Shuffles Sector Leaders

Let’s review a little history lesson, brought to you by Cornerstone Financial Services. Today, we’re going to look back to better understand the Covid-19 economy. Of course, we first need to thank our “sponsors”...

Encouraging Health, Market Signals Point Towards Recovery

Has the market moved on from Covid-19? It’s a fair question, given the significant rallies over the last couple weeks in both the equity and fixed income markets. At Cornerstone, we consider some of the uptick to be “false...

Welcome to the Eye of the Storm

It feels like we’re in a lull right now. Economically and socially, we’re stagnant. Most people are abiding by stay-at-home orders, and since many businesses aren’t open, there isn’t a lot of economic activity...

Caution About Our Future Must Balance Today’s Needed Repairs

The wrath of COVID-19 is still unfolding, and each day seems to bring something new. Thankfully, there have been positive recent developments on several fronts. But there have also been unprecedented actions that, while needed in these...

The COVID-19 Economy and How We’re Managing It

Unless you’ve been living under a rock or you’ve been on an “unplugged” retreat, you know about COVID-19 and the havoc it’s caused worldwide. There’s no need to review what’s transpired thus...

Alternative Investments: Middle Market Private Credit

Cornerstone Financial Services clients benefit from a team constantly looking for the right balance between risk and reward. That’s especially true when seeking yield and income in low interest rate environments, like we have now...

An Unknown Way Forward for a Transformed Workforce

For some time, employment data have improved. We often view them on a weekly or monthly basis, analyzing sectors and trends. As of late, the positive movement is clear. But rarely do we look at longer timeframes. And even more seldom...

The Good, Bad, and Ugly of our Current Economy

We’ve been in a Goldilocks economy for more than a decade, wherein things have generally been good, and neither too hot, nor too cold. Frankly, it’s the best sort of economic environment, even if rapid growth sounds better...

A Viral Catalyst to Market Correction

Not long ago, we talked about a market correction on the horizon. That began last week, with the spreading coronavirus being the catalyst. We saw COVID-19 fears drive significant daily declines, wiping out gains for the year. Frankly,...

Leveraging Change to Boost Returns

We’ve talked about it before. We’ll talk about it again. We talk about it every day. We’ll keep doing it until we’re blue in the face…because we can’t understate the importance of investment...

A Protection Plan for Senior Scams

Every day 10,000 baby boomers turn 65. Obviously, we all hope to age gracefully and retire happily in the process. But the reality is the boomer demographic is increasingly a target for financial scams and fraud, to the tune of almost...

Home Build Boom Could be Near

Since the last real estate crash, we’ve been making a slow and steady rebound. The most recent housing data not only suggest the trend is continuing, but that the rebound is picking up pace. In fact, the latest data blow...

Early Market Run Could Pause Soon

At Cornerstone we’re fairly bullish on 2020 growth from a fundamental perspective. That said, there are potential bumps in the road. So, we want to be cognizant of the short-term risks over the next six weeks or so. The Market is...

Record Buybacks, Dividends Could Spur More Growth

More than $3 trillion in capital is sitting on the sidelines, waiting to be deployed. Coupled with the huge amount of stock buybacks we’ve seen the past few years, and increasingly larger dividend payouts, this could be the fuel...

Global Growth Revival?

Thankfully, we have a deal done for the first phase of a U.S.-China trade pact, avoiding more tariffs. Just as well, Congress passed the United States-Mexico-Canada Agreement (USMCA), which replaces the outdated North American Free...

A SECURE Step for American Retirement

The Setting Every Community Up for Retirement Enhancement (SECURE) Act, which aims to provide a clearer path to a secure retirement for more Americans, recently passed into law. The new law includes many significant changes to the...

Strong Signs the Bull Will Keep Running in 2020

Our 2019 outlook forecasted a year of growth with some rockiness along the way. Looking back, it’s clear 2019 was a strong growth year. It also capped off the first decade in our history without a recession: Last year was a huge...

Unfamiliar Giving Method Can Produce Big Impact

We’re in the heart of the giving season and I’d like to talk briefly about charitable giving. There is a largely unknown way to give to charities that can produce big impact for all involved. The Qualified Charitable...

Next Year Could Deliver Growth for Equity, Income Investors

As we enter the new year, the Cornerstone team is continually examining equity and fixed income market data for what to expect in the future. Currently, we see opportunity for continued growth in 2020. Here’s why. Productivity...

Tide Could Be Turning for Emerging Markets

It’s been a brutal decade for emerging markets (EM) investors. But that trend may begin to change in 2020. There’s a possibility the EM disaster (relative to the S&P 500’s rise) could be on hold in the next 6-12...

Retail is Evolving, Not Dying

With the holidays upon us, we’re making a lot of purchases. In fact, the National Retail Federation forecasts nearly $731 billion in holiday spending this year. Yet, we often hear in the media about the “death of...

Why You Should Never Leave Your 401(k) Behind

Employees often have a sense of security associated with qualified workplace retirement plans (401(k), 403(b), etc.). It could be because of loyalty to their employer, belief in their retirement plan, or anything else. But employees...

2020 Optimism Taking Hold

I can’t say it enough – economic fundamentals are what really matter. Earnings and revenue are the levers that drive the economy. Almost all third quarter earnings have been reported, so it’s time to look to estimates...

This Yield Curve Doesn’t Predict a Bleak Future

The marginal yield curve inversion has made a lot of news this year because of its supposed ability to predict recessions on several prior occasions. If history repeats itself, there’s already a countdown on when our economic...

Politics, China Talks a Volatile Mix

There’s been a recent tweak to the U.S. trade talks with China. The two nations are now employing a phased approach to the negotiations and approaching agreement on the first phase. The new approach is most likely the result of...

Rebalancing is Tough, But Worth It

In our last post, we explained what rebalancing is, why it’s a good thing for investment portfolios, and the importance of having a plan. Now we’re going to dive deeper into why rebalancing works and how often you should it...

Breaking Down 5G Investing

The world is about to change. I’ve written about the coming 5G revolution, describing how it will enable widespread innovation, and how the buildout could be rewarding for investors as well. The pace of change will be rapid, and...

U.S. Economic Strength Drives Record Dividends

A most-welcome sign of economic strength for investors is arriving as S&P 500 dividend payouts are expected to reach an all-time high of $122 billion in Q3 2019. In the second quarter, the S&P 500 paid out $118.68 billion in cash...

Energy Value is Out There

Last month’s drone attacks on Saudi Arabian oil infrastructure caught the world’s energy markets off-guard. While details are still being determined, a few things are known. The attack took 5 percent of global oil...

What is Rebalancing?

When I see large, old trees, I often wonder the path they took to achieve their impressive forms. See, as trees grow, they need to be trimmed and “seen to” every now and again. If you’re a homeowner with trees on your...

Who’s Got it Better Than the U.S.? Nobody.

The Harbaugh family is famous in coaching circles, having produced multiple head football coaches. They’re also famous for the saying – “Who’s got it better than us? Nobody.” The quote speaks to the...

Consumers Driving the American Economy

The market rallied last month because of strong financial results from retailers, with Target, Walmart, and Lowe’s leading the pack. Interestingly, the consumer discretionary sector, which sells goods and services the public...

Stay Calm During Yield Curve Inversions

If you’ve been around any financial news lately, you’ve heard about the inverted yield curve. Most of the headlines say we need to worry, that the end is near, and recession is imminent. At Cornerstone, we don’t see...

The State of Global Income Inequality

I want to talk about income inequality – but not in the way you’re probably used to hearing in the news. Normally, income inequality is discussed along racial or gender lines. That’s an important discussion, without a...

1031 Exchanges: The Delaware Strategy

In our last post, we discussed the opportunities and challenges unique to 1031 exchanges. We learned that while the 1031 exchange is a powerful planning tool, it’s limited by IRS rules. Specifically, the requirements around the...

Our Debt Could Be Deadly

Normally I’m very positive in everything I talk about, and that’s primarily because there’s so much good to discuss. For instance, we’ve had 3-percent gross domestic product growth, low inflation, low interest...

Medicare 101: Use Medicare to Your “Advantage”

So far in this series we’ve discussed the basic parts of Medicare and “Medigap” supplement plans. Now let’s dive deeper into “Medicare Advantage” plans, which package Medicare Parts A and B with...

Medicare 101: Medicare Supplement Plans Explained

When you enroll in Medicare, you receive healthcare benefits, but what if they aren’t enough? Well, there are a couple ways you can supplement Medicare coverage, bridging the divide between basic coverage and what you really need...

The 5G Transition Will Bring Investment Opportunities

Cornerstone Financial Services is in constant pursuit of investment opportunities, using data to inform decisions that we hope ultimately result in healthy capital gains. And right now, our opinion is that the world may be at the edge...

1031 Exchanges: The Pros and Cons

In our last post on 1031 exchanges, we explained what they are and how they deliver a unique tax deferral benefit for real estate investors or selling business owners with real estate. But like any financial tool or strategy, there are...

Follow Data, Not Drivel

At Cornerstone Financial Services, we talk a lot about eliminating the noise from the financial media (especially bad news), and instead being data-driven to find real opportunities. To drive that home further, let’s be clear...

Medicare 101: Understanding Medicare’s Parts

At Cornerstone, we’re no strangers to helping retirees and those close to retirement handle many aspects of their financial lives. That undoubtedly includes medical costs, which are often higher as age increases. That’s why...

1031 Exchanges: What They Are and How They Work

In our last series on real estate investing, we covered the basics, including how real estate offers unique income and estate tax opportunities. But as we know, one of the potential downfalls of real estate investing is directly owning...

Data Show Continued Growth Despite Dips

There has been a bit of a recent pullback in the stock market, which history (and recent earnings reports) has shown can be a great opportunity for investors. Let’s start with earnings. This last earnings season brought some...

China More Vulnerable to Trade War Than U.S.

Recent volatility in the market can be attributed to the trade negotiations between China and the U.S. hitting an impasse. It’s gotten to the point where each country has announced new tariffs on the other, which potentially...

Long-Term Care: Protecting Your Family with Guarantees*

When it comes to the need for long-term care (LTC), there are basically three choices: Ignore it Self-fund or self-insure it Leverage existing assets for funding Which one are you doing right now? If you’re like most Americans,...

American Oil is Changing the Game

Let’s talk about oil. The U.S. benchmark for crude oil – the West Texas Intermediate crude oil index (WTI) – hit a high point at the end of the first quarter in 2014 at $107.26 per barrel, and a low point in February...

International Stocks Worth Another Look

The ongoing trade debate between China and the U.S. is losing its steam following the early 2019 Chinese economic rebound (6.4 percent gross domestic product growth in the first quarter). It was a higher-than-expected result and made...

The Great Decade That Only Felt So-So

The stock market hitting an all-time high made us at Cornerstone Financial Services think of how far things have come in a decade. To refresh your memory, let’s journey back in time to the first half of 2009, where things are...

Real Estate: The Reality of Direct Investing

In our previous post in this series, we looked at why you would consider investing in real estate and the ways it can be done. Now we’ll examine one of those ways in more detail – direct investing. Invest Carefully and...

The Positive Effect of Forward-Looking Earnings on the Market

The sentiment for the third and fourth quarters of 2019 is that earnings will recover from the trough we experienced in the first quarter of the year. Data firm FactSet analyzed investment analyst reports and determined there is a...

Life Insurance: Choosing the Right Policy

In our last post, we discussed how Americans are more vulnerable than ever when it comes to protecting themselves and their families with life insurance. Today, we’ll dive more into the types of life insurance available and the...

What Fed’s Change in Course Means Going Forward

In an abrupt and surprising change in policy, the Federal Reserve announced last month that there will be no interest rate hikes in 2019, and perhaps only one in 2020. It was widely believed the Fed would increase the Federal Funds...

The Financial Sector’s Recovery Story

Some folks continue to focus on the negatives in the financial sector. However, we at Cornerstone Financial Services think there’s much to praise about it. The recovery from the 2009 crisis is clearly ongoing; however, the job...

Real Estate Investing: Directions and Drawbacks

Last time we looked at real estate as an investment option relative to other types of investments. Now it’s time for a simple real estate investing question – do you want to do the dirty work of property ownership, or would...

The Value of Patience and Time

The stock market at the end of 2018 was a dumping ground. But 2019 has seen a huge turnaround, so far. Let’s take a look into the valuations and key growth sectors driving the good performance. Valuations Price-to-earnings (P/E)...

Long-Term Care: The Two Key Questions

Based on our experience at Cornerstone Financial Services, most people think long-term care (LTC) is confusing and a subject to be avoided. But it doesn’t have to be. When you boil it down, the basics of LTC are rather simple. In...

Fixed Income: As Alternative as the Ivy League

Last month we discussed how rising interest rates hurt traditional fixed income strategies. While bond performance may be lacking, it doesn’t mean lower-volatility investment instruments shouldn’t exist in a portfolio. From...

Don’t Let Emotion Cloud Your Investment Judgement

One of the greatest benefits of a financial plan is it provides a clear signal in a world full of noise. This is particularly true in times of market volatility. A bumpy ride can bring emotion into the mix – and that can be...

Life Insurance: Americans More Vulnerable Than Ever

Most Americans don’t have enough life insurance. Many have none at all. And every one of these folks are subjecting their families and their assets to substantial risk. To dive deeper into the American life insurance coverage gap...

Long-Term Care: Managing a Potentially Costly Risk

At Cornerstone Financial Services, we use a “panoramic planning” methodology that manages both risk and assets. In our opinion, risk isn’t discussed enough in general, especially since it’s such a big variable...

Real Estate Investing: Why and How

A constant topic of discussion at Cornerstone Financial Services is investment diversification. Most people think that means some mix of stocks and bonds. But there are other alternatives available for investors to reach their goals....

Fixed Income: How Rising Rates Kill a Portfolio

Over the years, Cornerstone Financial Services spoke often with clients about the effects of interest rates on traditional fixed income. We’re continuing that practice because everything still holds true in 2019. In this post...

Job, Wage Growth Debunking Recession Projections

The next big recession is supposed to hit in 2019. People in the media have been echoing this sentiment for a while. But I’m here to tell you, according to the hard data, that’s simply incorrect. We might not have a...

Growth Amid Uncertainty Marks the Year Ahead

According to pundits, 2019 either has recession written all over it, or it will be a great year. Not to discredit pundits and their accolades, but it’s important to realize headline news often has an underlying agenda. Plus, fear...