Market leadership changed significantly in Q4 2021. While large growth companies in general and FAANG stocks in particular have led this market higher for years - they were noticeable laggards in the most recently completed quarter. Small Cap value made a huge comeback and international and emerging market companies also outperformed.
As I expected, the November elections were much closer than pundits anticipated. Unfortunately, the followers of President Trump have felt "cancelled" by media and election results with some resulting and troubling violence. Vaccine rollout has been slower than anticipated - slowed by state and federal bureaucracies. This will be an important quarter for the history of the country with angst on both sides of the political aisles and much that needs to be done to mend the fabric of a fractured democratic government and society.
Changes in Leadership
As noted above, market leadership has experienced a long awaited change since October...
In addition there has been a change in national leadership as well - with a transfer of power on January 20th. While I have my own political views which don't exactly coincide with either of the narratives which seem to be attributed to the "other side" of the current discord - I wish to remain above the fray of partisan politics and make some comments that I believe relate to clients and prospects - regardless of party affiliation...
In the last of these quarterly newsletter I indicated that because I saw a general decline in goodwill towards those with opposing views things could get far worse before they got better. My suggestion then as well as now is:
1) Put the majority of your investable assets in stocks and bonds.
2) Take a 5-10% portion of your assets and prepare for emergencies and worst-case scenarios. Call me if you'd like an explanation of what this looks like.
I believe practical and prudent investing and preparation can make it easier to sleep at night and more likely to be successful whatever the short-term and long-term future have in store.
I also again encourage kindness and a high degree of giving others the benefit of the doubt in all our relationships. The vast majority of US citizens are good - but they may believe a different way of accomplishing that good than we do. As Longfellow wrote in a poem later made into a favorite Christmas song, practice "peace on earth, good will to men. . ."
