* This week, both David and Tracey teamed up to deliver the weekly newsletter. *
The Good - RSWA has a new team member! We are pleased to announce that Wesley McNeillie has joined RSWA! Wes recently moved to Portland from Tennessee where he has been a financial advisor for several years. He has a well-rounded background in financial planning, investment management as well as tax preparation. RSWA will not be adding tax preparation to our services, but the knowledge base will be well utilized for planning. He will be mostly working with Tracey Daigle to support our Portland office clients. Wes will also be involved firm-wide with investment research, financial planning strategies, and other firm activities. Please join us in welcoming Wes to our firm. And keep an eye out, we will be adding his bio to our website soon. To give you college sports fans the heads up – Wes is a University of Tennessee graduate and an avid Vols fan! You have been warned 😊.
The Interesting - Inflation Was Coming Down, Then it Wasn’t, Now it is Again: Last week the Consumer Price Index (CPI) was released and showed inflation had dropped -0.1% for June. For the last three months, the annualized inflation rate has been 0.8%. For the three months to start the year the annualized inflation rate was 4.4% which was a surprise since inflation had been falling throughout 2023. Inflation minus the volatile food and energy sectors paints a similar picture, but not as dramatic. For the last three months, annualized inflation minus food and energy was 2.4% whereas for the first three months of the year, it was 4.8%. The June report solidified in the minds of many, that inflation will soon return to the Federal Reserve target of 2.0% allowing them to start cutting short-term interest rates. Most market watchers expect the first cut to occur at the September meeting. The rate-setting committee meets at the end of this month, there could be a surprise cut then, but most don’t expect it. Bureau of Labor Statistics WSJ
The Ugly - Where Do We Go From Here? After the last decade, it’s hard to believe we can still be shocked. But, yet again, we were all shocked and startled last weekend by the attempted assassination of a former President and current candidate. In the aftermath, many (but, unfortunately, not all) leaders were saying the right things - that political violence has no place in democracy and is un-American, and we need more civility in politics and public commentary. It’s good to hear, but as citizens and voters, it is our job to hold them, and us, accountable. Let’s be sure to do that. (Removing the soapbox now…)
Financial Planning/Investment Strategy Corner:
Stock Performance Rotation? For the last decade, and the last few years, in particular, large company growth stocks have reigned supreme and trounced small and value company stock performance. And in the last year and a half, the performance has been more pronounced with the arrival and emergence of artificial intelligence (AI) which is currently being driven mostly by large growth companies. The reason is that not only are small and value companies less involved in AI they have also been hurt more by high interest rates. But things may be changing. When the latest inflation report was published last Thursday, small and value company stocks took off since they could benefit greatly by potentially lower interest rates. The chart below shows that from last Wednesday until this Wednesday, small companies represented by the ETF, IJR, are up over 9.5%, and value companies represented by the ETF, IWD, are up almost 5%. During that same time, the large company growth-heavy NASDAQ Index was down 3.66%. Does this mean there is a rotation occurring regarding stock sector performance? Who knows? We cannot know the future, so this could just be a one-week blip. As money managers, we do our best to reduce risk by diversifying a portfolio across multiple sectors of the market, so for us, it is a good sign that other sectors of the stock market are now seeing strong performance.
- What’s the least amount of exercise I can get away with (and still get benefits)? Time
- Meet the real-life storm chaser behind the movie Twisters: Scientific American
- What you need to know about blood pressure (especially, high blood pressure): Get Pocket
- The best 100 books of the 21st century – how many have you read? NYT
- Don’t know what to do with all the greens from your garden or farmer’s market – how about some lettuce soup? Epicurious
- Paris’ mayor swims in the Seine ahead of the Olympics – that’s dedication to your city: Axios
- Adam Schiff adds his voice to Dems asking Biden to step aside: Axios.com
Big Steps Forward in Medicine: In the last few decades, medical advances have been amazing. Diseases that once debilitated people are being managed and often cured. I remember what advanced rheumatoid arthritis looks like, my kids have no idea. That is just one of the many examples that are easy to come up with. Now with the use of gene-editing, they may have found an effective treatment for sickle cell anemia. Gene editing is controversial, and we have to step very slowly and carefully, but what if this is the first step to cure any number of diseases? Axios Cleveland Clinic
Quote: “Democracy is a device that ensures we shall be governed no better than we deserve.” George Bernard Shaw
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