Nathan Geraci

Peculiar Markets, Inflation, & the Fed

The first half of 2022 will go down as one of the more challenging market environments many investors have ever experienced.  The S&P 500 fell 20%, its worst performance at the midway point of a year since 1970, 52 years ago.  Broad U.S. bonds delivered their worst start to a year in history, down 11%.  Investors would be forgiven if they thought bonds might offer some salvation during a stock bear market.  Coming into the year, bonds had posted positive returns in 42 out of the past 46 years, with an average intra-year drop of only 3.1%.  However, stocks and

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3 Keys in Changing Markets

The Russia-Ukraine war, accelerating inflation, and rising interest rates dominated headlines during the first quarter of 2022, which witnessed stocks and bonds uncharacteristically declining at the same time.  It’s no surprise to see stocks occasionally post losses given the average intra-year decline in the S&P 500 since 1980 is about 14%.  However, broad investment grade bonds – typically viewed as a ballast in a diversified portfolio – experienced their worst quarterly performance since 1980.  Bond prices tend to move in the opposite direction of interest rates, which spiked during the quarter.  For most investors, this atypical environment created a situation

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Market Sideshows, Diversification, and the Fed

Successful investors have an uncanny ability to ignore financial market sideshows, embrace diversification, focus on longer-term goals, and exercise patience when things aren’t working well.  This hasn’t exactly been easy over the past two years, which featured a harrowing 34% drop in the S&P 500 during 2020 and subsequent historic recovery, high-flying meme stocks and crypto assets distracting investor attention, the continued underperformance of international stocks, and a constant deluge of alarming headlines. 2021 might best be characterized as the year financial markets “jumped the shark”.  Consider some of the many market sideshows witnessed last year.  Stocks such as GameStop

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Threading the Needle

The S&P 500 barely managed a gain during the third quarter, which featured an uptick in volatility driven by growing inflation concerns, the U.S. debt ceiling debate, and negative headlines out of China.  Notably, the S&P 500 ended a streak of 227 days since its last 5% decline, the 7th longest such streak on record.  Most other asset classes – from small cap U.S. stocks to international stocks to investment grade bonds – all closed negative. While the debt ceiling debate and Chinese turmoil are causing some anxiety, the prospect for sustained inflation is the largest driver of investor unease

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The Pause That Refreshes

The second quarter of 2021 might best be characterized as “the pause that refreshes”. After a chaotic first quarter – and certainly 2020 – the past three months felt mostly “normal”, if we can use that word these days. There were no elections or political riots. The pandemic is waning, at least in the U.S. Day-to-day life is taking on more of an ordinary feel. On the investing front, global equities are sitting near record highs and bond yields near historic lows. If nothing else, the quarter offered an opportunity for investors to catch their breath and take stock of

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ETF Prime: A New Chapter

It’s hard to believe, but this summer marks ten amazing years since the launch of ETF Prime. Some already know the backstory, but the podcast actually began as a local radio show in Kansas City.  Its roots go back to early 2011 when I found myself in a packed Starbucks discussing ETFs with a business acquaintance. Even though ETFs had been around since 1993, we were debating whether the average person even knew what an ETF was. After one too many cups of coffee, I decided to settle the argument. I approached the nearest person and simply asked, “Have you

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One Year Later: Memes & Vaccines

After historic market chaos in 2020, investors would be forgiven if they assumed 2021 might be a tad calmer.  Instead, events of the first quarter each read as their own outlandish movie script (and, in fact, big screen deals are already in progress):  the Capitol Storming, Reddit message board traders battling hedge funds by piling into GameStop and other “meme” stocks, a massive container ship wedged into the Suez Canal, the family office Archegos blowing up… to name a few.  These epic dramas unfolded one after another, captivating investors who surely thought, “ok, now, I’ve seen it all”.  While blockbuster

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The “Real World”, Markets, & Certainty

What a year.  A deadly global pandemic.  Emotional protests and civil unrest.  A cantankerous, disputed election.  2020 was a year most would like to forget.  However, despite all of the “real world” challenges, financial markets kept chugging along with stocks and bonds delivering healthy returns to investors.  A one-two combination of swift Federal Reserve monetary response and the government’s fiscal stimulus shepherded the markets through the darkest days of 2020’s Covid-induced crisis.  The contrast was stark between the doom and gloom of March and investor euphoria driven by optimism on a vaccine and an anticipated economic reopening in November and

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