The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations
for any indicual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly.
Economic forecasts set forth may not develop as predicted.
Investing in stock includes numerous specific risks including: the flection of dividend, loss of principal and potential illiquidity of the investment in a falling market.
Investing in special market and sectors carries additional risks such as economic, political, or regulatory developments that may affect many or all issuers in that sector.
The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S.-based common stocks listed on the NASDAQ stock market. The index is market-value weighted. This means that each company’s security affects the index in proportion to its market value. The market value, the last sale price multiplied by the total shares outstanding, is calculated throughout the trading day and is related to the total value of the Index. It is not possible to invest directly in an index.
The Dow Jones Industrial Average Index is comprised of the U.S-listed stocks of companies that produce other (non-transportations and non–utility) goods and services. The Dow Jones Industrial Averages are maintained by editors of the Wall Street Journal. While the stock selection process is somewhat subjective, a stock typically is added only if the company has an excellent reputation, demonstrates sustained growth, is of interest to a large number of investors and accurately represents the market sectors covered by the average. the Dow Jones averages are unique in that they are price weighted; therefore their component weightings are affected only by changes in the stocks’ prices.
The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
This research material has been prepared by LPL Financial LLC.Securities offered through LPL Financial LLC. Member FINRA/SIPC.

June 2022 Client Letter

June 1, 2022

Dear Valued Investor,

The bull market that began in March of 2020 came dangerously close to an end. From March 23, 2020 through January 3, 2022, the S&P 500 Index gained 114% (excluding dividends). From that January 3 closing high through the recent low on May 19, the S&P 500 fell nearly 19%, narrowly avoiding the level at which bull markets end and bear markets begin.

While we wait uncomfortably to see if the S&P 500 can hold its recent lows, it is somewhat reassuring to know that bear markets that are not accompanied by recessions tend to be milder:

  • Bear markets without recessions tend to last an average of about seven months, and we’re already five months into it.
  • The only bear markets that took more than 46 days to bottom after the initial 20% decline were associated with recessions—1970, 1973, 1982, 2001, and 2008.
  • Bear markets not accompanied by recessions have historically experienced smaller declines, losing an average of 24%.
  • Five of the past six non-recessionary bear markets saw the S&P 500 lose 22% or less.

Bottom line, if the U.S. economy is able to avoid recession over the next 12 to 18 months—as we expect—then this selloff may be over soon and stocks could potentially make a run at their previous highs by year-end.

That doesn’t take away from the increasingly challenging environment consumers and businesses are facing as sky-high inflation shows few signs of relenting. Recession risk is rising, increasing the chances of a larger decline—the average recessionary bear market decline is 34.8%. The Federal Reserve has taken away the punchbowl, giving markets a hangover. The cure is lower inflation, but it will take time.

Those who believe this environment is like the 1970s, 2000-2002, or 2008-2009, may want to consider more defensive positioning of portfolios. Those are the types of environments where some companies don’t survive. But if the economy stabilizes as the Fed hikes rates to tame inflation—the so-called “soft-ish landing” Fed Chair Powell aspires to achieve—then the best path forward may be to ride this out. Market timing is hard. The sharpest rallies tend to come during bear markets and are costly to miss for long-term investors.

Investors are anxious right now and understandably so. Legendary investor Warren Buffett tells us that situations like that are an opportunity to be greedy, not fearful. Sir John Templeton, another legendary investor, tells us bull markets are born on pessimism (and grow on skepticism, mature on optimism, and die on euphoria). Well, we have a healthy dose of pessimism right now to provide fuel for the next rally.

Buffett’s advice makes sense but is difficult to follow in practice. For those who can fight off the temptation to sell when stocks are down and have an investing time horizon spanning more than a year or two, history suggests you will be positioned to do well. Bear market recoveries prior to record highs take 19 months on average. When not accompanied by recession, they take just seven months. From a long-term investing perspective, that’s not long to wait. Please contact me if you have any questions.

Sincerely,

Wayne Rigney

____________________________________________________________________________________

Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of June 1, 2022.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All index data from FactSet.

The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Tracking # 1-05286775

Additional May 2022 Client Letter

May 11, 2022

Dear Valued Investor,

2022 has been a challenging year for investors so far. The S&P 500 Index just had one of its worst Aprils in decades, and May is off to a rocky start. Bond investors have not fared much better as rising interest rates have pushed down bond prices. Bond losses have made the stock market volatility feel even worse than usual. Markets don’t like uncertainty but it’s getting a healthy dose of it this year, dealing with high inflation, tighter Federal Reserve monetary policy, COVID-19 shutdowns in China, and snarling global supply chains, all while the war in Ukraine continues.

Investing mistakes often take place during periods of elevated volatility. One of the most frequent is trying to time the market by jumping in and out. Market timers must be right twice, and timing the return to the market can be extremely difficult to pull off. Markets can turn quickly, and missing even just one big up day can significantly reduce returns over time. The biggest daily gains tend to come in down markets, making them especially difficult to predict. Time in the market, not timing the market, may be more beneficial to long term investors.

When markets are shaky, it can be helpful to look to long-term fundamentals that have provided the foundation of positive returns for stocks and bonds over the long run. For stocks, gains depend on the ability of corporations to grow earnings, which they have continued to do during first quarter earnings season—S&P 500 Index earnings per share are on track to increase 10% year over year. For bonds, the key fundamental has simply been the ability of borrowers to make required payments. Corporations and consumers enjoy strong balance sheets and have the financial firepower to pay their debts. While the future is always uncertain, we believe those fundamentals remain in place.

Even against a potentially supportive fundamental backdrop, the volatility we’ve seen in stocks this year is not unusual. Although negative returns for a full calendar year are infrequent, corrections are fairly common. Since 1980, the S&P 500 has been negative for a calendar year just seven times, but the average decline within any year has been 14%. Mid-term election years have tended to see increased early year volatility, as the honeymoon period for a new president ends and political uncertainty rises. Inflation can also be challenging. Years with inflation over 5% have seen more frequent stock market declines than a typical year, but stocks have still been higher more often than not.

Amid the global economic and geopolitical uncertainty, the core domestic economy is still quite stable. Weekly consumer spending data is above typical baseline levels. Job seekers are participating in a tight labor market with twice as many openings as unemployed people. Businesses are enjoying high profit margins despite cost pressures. The economy is expected to grow in the latter part of this year after a surprise contraction in the first quarter, though the growth path may be bumpy as monetary policy is recalibrated from exceedingly loose to moderately tight and consumers and businesses adjust to higher borrowing costs. Our base case is still for above-trend economic growth in 2022.

We believe patient investors stand a better chance of meeting their long-term goals. No one has a crystal ball, but at lower valuations, history suggests the chances of above-average returns going forward may be rising. It’s tough to do during times like this, but we encourage long term investors to stick to their game plan.

Please contact me if you have any questions.

Sincerely,

Wayne Rigney

___________________________________________________________________________

Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of May 9, 2022.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All index data from FactSet.

This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Tracking # 1-05279947 (Exp. 05/23)

May 2022 Client Letter

May 4, 2022

Dear Valued Investor,

As we move into spring and leave behind the last signs of a long winter, many worries from a chilly start to the year for markets, unfortunately, are still with us. The S&P 500 Index had its worst April in more than 40 years, leaving the index down over 13% for the year. Previously highflying stocks have come back to earth, with many of them cut in half or more. And bonds, which have historically provided support during times of stock market volatility, have done little to protect portfolios.

The concerns that have contributed to the poor start are well-known. Historically high inflation, supply chains disruptions, China in another lockdown, geopolitical concerns, an aggressive Federal Reserve Bank (Fed) rate hiking campaign, and soaring yields have all contributed to the worries. Not to mention economic growth worries are spreading after the 1.4% decline in gross domestic product (GDP) during the first quarter.

Just as April’s dark storm clouds are often chased away by a brighter May, we remain optimistic that more sunshine could be coming. Yes, the GDP report showed an economy that contracted in the first quarter, but that was mainly due to drags on inventory and trade, while more important parts of the economy like consumer spending, housing, and private sector investment all accelerated compared to the fourth quarter. Additionally, 2011 and 2014 both saw negative first quarter GDP prints, followed by big rebounds in the second quarter to avoid recessions. We expect GDP to grow approximately 3% this year and avoid a recession thanks to a strong consumer and a healthy corporate earnings backdrop.

Inflation could be nearing a peak, offering a potential driver for improved confidence in the second half of this year. Used car and truck prices have come down significantly over the past two months, while shipping costs have also dropped nicely. These two bits of data suggest inflation may be past its peak, even if it may take a while for it to get back to normal. Add in supply chain normalization and the potential for a ceasefire in Ukraine to remove some upward pressure on commodities, and the Fed may not hike rates nine times as the bond market is currently pricing in.

From its early January peak, the S&P 500 has corrected 13.9% (as of April 29), right in line with the average yearly correction since 1980 of 14.0%. As uncomfortable as this year has been, this action is actually about average. Additionally, midterm years tend to be even more volatile, correcting more than 17% on average, but the index rebounded 32% on average in the 12 months following those midterm year lows. Lastly, the last 21 times the S&P 500 has been down double-digits since 1980, the index rallied back to end the year positive 12 times. Don’t give up hope yet.

The investing climate is quite challenging, but based on historical trends, we believe patience may be rewarded. Even if there may be some downside in the short term, consumer and business fundamentals remain supportive. Strong profits and lower stock prices mean more attractive valuations, and current levels may end up being an attractive entry point for suitable investors.

Please contact me if you have any questions.

Sincerely,

Wayne Rigney


Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of May 3, 2022.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All index data from FactSet.

This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Tracking # 1-05275942  (Exp. 05/23)

Additional April 2022 Client Letter

April 28, 2022

Dear Valued Investor,

It has been a turbulent 2022 so far for investors. The S&P 500 Index is on track for its worst April in more than 40 years, the Nasdaq entered a bear market on April 26 with its more than 20% decline, and bonds, which typically provide ballast for diversified portfolios during periods of stock market volatility, have not protected.

Markets face a number of threats. The COVID-19 pandemic has contributed to a disappointing start to the year for the U.S. economy as evidenced by the -1.4% growth in gross domestic product (GDP) reported on April 28. COVID-19 continues to disrupt global supply chains amid intermittent lockdowns in some of China’s largest cities. Russia’s devastating assault on Ukraine, arguably the biggest geopolitical threat in Europe since WWII, has added to the worst inflation problem in the U.S. since the 1970s. The bond market is pricing in nine more Federal Reserve (Fed) rate hikes, after looking for only three when the year began. That’s a lot for investors to digest.

But during a market correction it’s easy to forget that this volatility is actually quite normal.

  • The S&P 500 Index has fallen 13% peak to trough this year, below the 14% average of all years.
  • During midterm election years, the average stock market correction is 17%, but stocks rebounded 32% on average in the 12 months following those midterm year lows.
  • Of the last 21 times the S&P 500 has been down double-digits since 1980, stocks rallied back to end the year positive 12 times.
  • During those 12 positive years, the average gain has been a stellar 17%.

We will admit a double-digit gain in 2022 is unlikely, but a U.S. consumer willing and able to spend, which makes recession unlikely in the near term, and steadily rising corporate profits still make a positive year for stocks in 2022 more likely than not, in our view.

Inflation remains a big concern, but a number of factors could put downward pressure on prices beginning this summer. On the supply side, where most of the problem lies, supply chain normalization and more job-seekers coming off the sidelines could help ease pressure on goods prices and wages. An eventual cease-fire in Ukraine could remove some of the upward pressure on commodity prices. On the demand side, higher interest rates can help cool housing. The bond market is already doing some of the Fed’s work with the 10-year Treasury yield nearly doubling in four months to 2.8%. These factors could easily cut headline consumer inflation in half by year-end from the current annual pace of 8.5%.

The outlook for corporate profits remains quite positive and may help prevent stocks from pulling back much further. With about 180 S&P 500 companies having reported, double-digit earnings growth appears within reach while analysts’ estimates for 2022 have continued to rise. These numbers are excellent considering slow economic growth, supply chain disruptions, and inflationary pressures.

The investing climate is quite challenging, but history suggests patience will be rewarded. Even if there may be some downside in the short term, consumer and business fundamentals remain supportive. Strong profits and lower stock prices mean more attractive valuations. Our belief is that current levels will end up being an attractive entry point.

Please contact me if you have any questions.

Sincerely,

Wayne Rigney

____________________________________________________________________________

Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of April 28, 2022.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All index data from FactSet.

This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Tracking # 1-05273623 (Exp. 4/23)

April 2022 Client Letter

April 7, 2022

Dear Valued Investor,

“Bull markets are born on pessimism, grown on skepticism, mature on optimism, and die on euphoria.” – Sir John Templeton

According to the guidance of revered investor Sir John Templeton, it appears to us that this market may have a bit more left in the tank. The market returns we witnessed in March seem to bear this out, as stocks surged during the month despite the backdrop of war in Ukraine, inflationary pressures, and surging interest rates. However, over the intermediate term, the path forward may only be partially defined by Federal Reserve policies, global diplomatic efforts, and rates. Why?  For one reason—earnings from corporate America remain strong and the jobs market is back to approximate pre-pandemic levels. Indeed, there seems to be plenty of skepticism, but market fundamentals have yet to be materially shaken from their foundation.

Historically, geopolitical events have typically dented market sentiment for a period, but stocks have shown a tendency to rebound rather quickly when initial pessimism subsides. Past performance is no guarantee of future outcomes of course, but the latest market rebound seems to fit historical precedents. After hitting a March closing low of 4,170, the S&P 500 Index has regained considerable ground and is hovering near 4,500 at the time of this letter.

Meanwhile, the Federal Reserve’s first move to raise interest rates (in March) was well telegraphed by market participants, and most expect further tightening from the central bank. The primary policy target is rising U.S. inflation, an undesirable circumstance driven by unprecedented COVID-19-induced economic volatility and a massive policy response. That has been further complicated by current geopolitical tensions. The good news is we expect inflation to come down significantly as the year progresses.

And finally, the third pillar in the latest wall of worry is new concern over yield-curve inversion.  Recently, the 10-year Treasury yield fell below the two-year Treasury yield, an occurrence that has preceded economic recessions in the past, but not always.  A similar circumstance transpired in 1998 and 2005 and no recession immediately followed, while a recession following the yield curve inversion in 2019 would have been very unlikely if not for COVID-19. So while yield curves may tell a cautionary tale and the media is quick to report on it, we do not believe a recession is imminent, given the overall strength in the economy.

To sum it all up, March has given us some signs that staying the course may be the most prudent investing decision to make. Although we warned that volatility was likely to return in 2022, and it has, we believe riskier assets, like stocks, still may present opportunities for investors. In our view, financial conditions remain favorable, earnings may continue to surprise to the upside, and economic data in many corners of the economy remain favorable. These elements help us label the recent market skepticism as potentially healthy and help us to forecast that the upswing in the business cycle may yet have a ways to go.

Please contact me if you have any questions.

Sincerely,

Wayne Rigney

________________________________________________________________________________

Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of April 1, 2022.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All index data from FactSet.

This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Tracking #1-05265226 (Exp. 04/23)

March 2022 Client Letter

March 10, 2022

Dear Valued Investor,

The green shoots are hard to see right now as spring approaches, clouded by war in Ukraine. Democracy is under attack and innocent lives are tragically being lost. But while we keep one eye on overseas developments, the other remains squarely focused on the fundamentals of the U.S. economy and the stock market to help investors stay the course.

Geopolitical uncertainty can be tough for investors to manage. The natural impulse for many is to sell, which history clearly shows is usually poorly timed. As difficult as it may be to see the green shoots through the fog of war, these periods usually end up representing good buying opportunities for investors.

Stocks have historically proven to be quite resilient to major geopolitical events and this time shouldn’t be an exception, even if the wait is uncomfortable. Over the past 70 years, only three major geopolitical events took the S&P 500 Index more than nine weeks to recover its post-event losses: 1) Pearl Harbor (307 days), 2) the breakout of the Korean War (82 days), and 3) Iraq’s invasion of Kuwait (189 days, when the U.S. economy was already in recession in 1990). None of these events seems comparable to the Ukraine conflict. Looking at all major geopolitical events since World War II, the average post-event loss for the stock market has been just 5%, with an average recovery time of less than seven weeks. The U.S. economy’s track record of resilience and corporate America’s ability to adapt are unparalleled.

The war in Eastern Europe will, however, carry an economic cost for the United States, though it will be modest. Although U.S.-Russia trade is minimal, we use very little Russian oil, and our banks hold a negligible amount of Russian assets, higher global oil prices will be felt by U.S. consumers. But it won’t be enough to stop us from spending, especially as COVID-19 restrictions disappear. For Europe, the cost will be higher due to the continent’s greater reliance on Russian energy, so steering investments away from Europe and more toward the U.S. makes sense for now.

This is a tough time for everyone as compassionate human beings and as investors. Russia’s aggression is unsettling and the images of the humanitarian crisis in Ukraine are disheartening. Ukraine’s resistance is inspiring and we pray for the country and its people.

While it’s impossible to know how this conflict will play out, the outlook for the U.S. economy and corporate profits remains bright. Stocks have become more attractively valued following the latest correction, interest rates remain low, the Federal Reserve will likely now take a go-slow approach with its rate hiking campaign, and markets have historically proven resilient to major geopolitical events. Be patient and stick to your plan.

Please contact me if you have any questions.

Sincerely,

Wayne Rigney

__________________________________________________________________________

Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of March 1, 2022.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All index data from FactSet.

This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Tracking #1-05251061

February 2022 Client Letter

February 3, 2022

Dear Valued Investor:

The calendar had barely flipped to 2022 and investors were reminded that even attractive long-term stock returns come with a cost: volatility. The S&P 500 Index fell nearly 10% from January 3 through January 27 amid fears that the Federal Reserve (Fed) will have to get a lot more aggressive to fight inflation, before staging a 4% rally over the last two days of the month to end January down 5%. After such a steady march higher in 2021, the dip may have caught some investors off guard.

For those whose anxiety levels may have risen a bit last week, here are some numbers that may provide reassurance:

  • Even in positive years for the S&P 500, on average the index experiences a maximum peak-to-trough decline of 11%. This year’s max drawdown is now 9.8%.
  • After a correction of 10-15%, the index has experienced an average one-year gain off the lows of 22% and has risen in 12 of the 13 one-year periods.
  • The average stock market gain one year after the first Fed rate hike of an economic cycle has been 11%, with gains the past eight cycles dating back to 1983.
  • When investor sentiment is most negative, as it was during the past two weeks based on the American Association of Individual Investors (AAII) investor sentiment survey, stocks have risen an average of 11% in the next year.

This data argues that stock investors should stay the course. But remember that gains in 2022 will likely be tougher to come by than in 2021. They may be more modest and happen later in the year, as is typical during midterm election years.

The good news is that an inflation peak may be near as the COVID-19 Omicron variant loses its punch. Slower, but still solid, economic growth this year will help cool inflation as Fed rate hikes take hold.  We’re already seeing backlogs and bottlenecks start to clear. We expect more people to jump back into the labor force later this year, easing wage pressures. We may also get some help from lower oil prices, though that may have to wait for Russia-Ukraine tensions to die down.

These uncertainties make the road ahead for stocks tougher. But with U.S. consumers and businesses in excellent shape, the U.S. economy may grow 4% this year, well above the pace of the last decade. Corporate America is showing once again during fourth quarter earnings season that it is thriving with S&P 500 earnings poised to increase by more than 25% year-over-year.

Perhaps the stock market in 2022 will be like the exciting NFL playoff games played during the past two weekends—with a lot of back and forth between the bulls and the bears before the bulls grind out a hard-fought win late in the game.

Please contact me if you have any questions.

Sincerely,

Wayne Rigney

_______________________________________________________________________________

Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of February 2, 2022.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All index data from FactSet.

This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Tracking #1-05239783

January 2022 Client Letter

January 6, 2022

Dear Valued Investor:

With the New Year comes new beginnings, new goals, new challenges, new friendships, and new opportunities. 2021 was an incredible year for the economy and investors, but to us the future remains bright for 2022 and beyond.

Let’s take a look back at 2021. Our economy is on track for over 5% growth for the year, which could end up being the best year for economic growth since the early 1980s. The dual tailwinds of fiscal stimulus and monetary policy helped steady the economy as it dealt with historic supply shortages, record inflation, employment shortages, and the pandemic. Looking to 2022, as the U.S. economy moves to more mid-cycle, 4.0-4.5% gross domestic product (GDP) growth is quite likely. This isn’t as strong as 2021, but would still be much better than recent years.

One of the key themes we see in 2022 is for the economy to be ready for a handoff, moving away from government spending and monetary policy, back to a greater emphasis on the individual choices of households and businesses. We see this passing of the baton in 2022 with consumers, productivity, small businesses, and capital investments all playing a part in the next stage of economic growth. Inflationary pressures may steadily decrease over the next year as conditions improve, but how smoothly that handoff is executed may determine the course of the recovery.

The stock bull market continued last year with very solid gains. In fact, the S&P 500 Index had the second most new all-time highs in any year ever in 2021. It was an incredibly consistent move higher as well, with all 12 months of 2021 making a new all-time high along the way. Strong earnings growth and an adaptive corporate America helped contribute to the healthy stocks gains. This economic cycle likely has at least a few more years left, increasing the chances of another good year for stocks in 2022.

The battle against COVID-19 is far from over, but we continue to see light at the end of the tunnel. The Omicron variant is the new dominant strain, but hospitalizations and deaths are fortunately still well off previous peaks from earlier strains, even as new cases soar. Cases of the flu are beginning to show up, something that we haven’t seen since early 2020, and yet another clue COVID-19’s grip on us could be loosening.

Lastly, 2022 is a mid-term year, which means Washington talk will dominate the news cycle. Please remember to separate your political views from your investments, as the stock market cares more about the future of the economy than anything else. Though 2021 was an easy year for investors, 2022 will probably be harder. Mid-term years historically have been quite volatile for stocks. It is always important to have a plan in place before the storm potentially comes. The time to plan is before, not during, the storm.

Here’s to a successful and healthy 2022, and please contact me if you have any questions.

Sincerely,

Wayne Rigney

_________________________________________________________________________

Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of January 3, 2022.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All index data from FactSet.

This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Tracking #1-05228313

Outlook 2022 Executive Summary

Outlook 2022 Executive Summary

Click here to read the full report

Click here to read more from this Executive Summary

PASSING THE BATON

Our resurgent economy grew at over a 6% pace in the first half of the year and is on track

for over 5% growth for the year when 2021 draws to a close. The current economic recovery,

which started in May 2020, has benefited from widespread vaccine availability and

additional fiscal stimulus. While the economy continues to move forward, we’re still

feeling the aftershocks of the COVID-19 Delta variant, whether through elevated inflation,

supply chain bottlenecks, or an imbalanced labor market. But 2021 also saw positives

beyond economic growth, with schools opening their doors and extended family gathering

around many Thanksgiving tables, activities that were far less common in 2020. At the

same time, the S&P 500 Index continued to advance as corporate America faced this

generational challenge with resiliency and saw earnings growth that surprised even the

most optimistic pundits.

The recovery has been a testament to our ability to manipulate our world. Scientists

developed several vaccines extraordinarily quickly. Central banks and policymakers found

ways to insert themselves into the complex network of economic relationships to help

bridge the worst of the economic crisis. But the same scale that multiplies our control of

the world can also multiply potential mistakes and make robust, complex systems more

fragile. We’ve had a hand up that has helped us through a period of unique economic

challenges. In 2022, the economy may be ready for a handoff, back to a greater emphasis

on the individual choices of households and businesses. How smoothly that handoff is

executed may determine the course of the recovery.

On a smaller scale, for many of us, those individual relationships that always sustain us

have been that much more vital over the last two years. We managed to stay connected

with friends and family. Found new ways to work together with our colleagues. And relied on

our relationships with skilled professionals to navigate difficult decisions. Sound financial

advice in particular has helped guide many through this period of uncertainty. LPL Research’s

Outlook 2022: Passing the Baton is here to provide insight and analysis for the next set of

challenges the economy and markets may face.

December 2021 Client Letter

December 2, 2021

Dear Valued Investor:

We hope everyone enjoyed the Thanksgiving holiday with family and friends. While life has been challenging during the pandemic, we have a lot to be thankful for. At this time, we are especially grateful for COVID-19 vaccines and treatments that have helped us make so much progress tackling the pandemic. Unfortunately, the emergence of the new COVID-19 Omicron variant and the related market selloff in the days after Thanksgiving offered an unpleasant reminder that the pandemic is not over. The economy and financial markets remain somewhat reliant on the medical community and research developments.

Predicting the impact of the new variant is difficult, if not impossible, at this point. But there are logical reasons to expect limited economic impact, such as high vaccination rates, advances in treatments to reduce instances of severe disease, and various containment measures to limit spread (masks, distancing, etc.). Lockdowns are extremely unpopular, so we’re probably not headed there again, but we have a playbook that we can be reasonably confident will work.

However, key questions remain unanswered. Will existing vaccines be less effective against Omicron? Will symptoms be more severe than prior variants? Is this latest variant more transmissible than prior variants? So, while we think the drag on the economy will be modest, we simply won’t know for sure until we get more data over the next couple of weeks. Markets don’t like uncertainty, but we’ll have an extra helping of it on our plates along with Thanksgiving leftovers for a little bit.

Omicron does not change the fact that the U.S. economy is showing some strong momentum. A solid 1.7% increase in retail sales in October and a good start to the holiday shopping season point to strong consumer spending in the fourth quarter. The National Retail Federation sees holiday sales potentially increasing by 10% this year compared with 2020. Meanwhile, new filings for jobless claims for the week ending November 19 fell to a 50-year low, an impressive number even considering distortions from seasonal adjustments.

Businesses are doing their part to support financial markets in a tough operating environment. Profits from S&P 500 Index companies rose nearly 40% year over year in the third quarter and are expected to rise another 20% in the fourth quarter (source: FactSet) despite persistent supply chain disruptions, shortages of labor and materials, and related cost pressures. Net profit margins for S&P 500 companies in the third quarter remained near record-high second quarter levels, a remarkable feat given the circumstances. Finally, manufacturing surveys point to solid demand while offering signs that supply chain disruptions, and possibly inflation pressures, may be at or near a peak.

The path back to normal has been bumpier than anticipated, but we’ll get there. Omicron probably won’t derail the economic recovery or cause a stock market correction, but we just can’t know for sure. At least not yet. Stay tuned.

Here’s hoping you have a wonderful and healthy holiday season. Please contact me with questions.

Sincerely,

Wayne Rigney


Important Information

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

All data is provided as of December 1, 2021.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.

All index data from FactSet.

This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Tracking #1-05218111