Broker Check

August 2022 Investylitics

Horizon Advisor Network Investment Committee August 16, 2022

Executive Summary

  • After bottoming in mid-June, the markets have rebounded strongly over the past two months.
  • The significant moves in the market this year, both up and down, have moved Investors from fear to euphoria in a very short period of time.
  • There is significant discussion about whether we are in a recession now or headed towards one. Against this backdrop, many economic indicators continue to slow or deteriorate.
  • For those taking monthly withdrawals or who have upcoming liquidity needs, the recent uptick in account values provides an opportunity to refill your cash buckets.
  • While dealing with bouts of volatility, it is important to remember to focus on the long game, and stay committed to your plan, and the allocations that will help you achieve your goals.

The Horizon Advisor Network Investylitics Committee delayed our monthly meeting by a week in order to have the rare opportunity to meet in person at Cetera‘s recent Connect2Peers Conference in Dallas, Texas. The committee was able to secure a special meeting room on the afternoon of Tuesday, August 16th.

The committee members are happy to see the recent rebound in the markets. From its all-time closing high on January 3rd, to its closing low (so far) on June 16th, the S&P 500 has gone through multiple bouts of selling. This caused the unmanaged index to drop more than 23%. This up-turn has allowed the markets to recover approximately one half of their year-to-date losses. This gives us the ability to refill cash buckets for those clients who are taking monthly withdrawals or have needs for liquidity in the next six to twelve months.

A number of indicators followed by economists have continued to deteriorate. This includes retail sales, wage growth, and new orders. The shape of the yield curve is also causing some concern. We have now seen the yield on short-term bonds rise significantly above longer-term bonds. This is historically indicative of a future recession, as you can see in the chart below. The big question is when?

Source: Guru Focus

It is interesting to note that the most recent employment report saw the unemployment rate drop to 3.5%, matching the 50 year low, just before the COVID-19 outbreak began. It is important to remember that unemployment, as well as inflation, are both lagging economic indicators. Therefore, they are backward looking. 

A common question we are being asked is how can you have a recession when the unemployment rate is so low? Once again, historical perspective helps put things in context. As you can see from the chart below, low unemployment rates have typically preceded recessions over the last 50 years.

Source: Richard Vesel

The Federal Reserve Bank will hold their annual meeting in Jackson Hole, Wyoming on Friday, August 26th. We are expecting to hear more from Chairman Jerome Powell about the outlook for inflation and Fed policy. One of the reasons that the markets have rallied strongly over the last few weeks is the perception that the Fed may be close to being done raising interest rates. 

We can look back at the last period of significantly higher inflation during the late 70’s and early 80’s for some guidance. During those times, the Fed had to raise short term interest rates above the rate of inflation to bring it under control. With short term interest rates at 2.375%, and inflation running at 8.5%, we are nowhere near this historical precedent. All eyes will be on the Fed this week, as they have used the Jackson Hole symposium to announce major policy changes in the past.

As markets have swung from a significant downturn to a sharp rally, investor sentiment has moved right along with it. It did not take long for people to go from fear, to fear of missing out. During times such as this we need to control what we can control. This includes our asset allocation, our liquidity, and our emotional response. We know that people who respond emotionally tend to make poor choices that lead to future regrets.

We expect that with inflation, geopolitical uncertainty, and the upcoming mid-term elections, volatility will persist. To that end, your financial plan and the advisor who helped you put it together should be where you look for guidance during these times. Your plan should give you direction and confidence as you move through your investing lifetime, which we would like to remind you, is measured in decades, not days.

We are here for you. If you have questions or concerns as we move through the news and noise of the day, please feel free to reach out. Together, we can navigate through the wind and the waves of today’s storm and stay focused on the horizon of where we want to land.

Thank you so much for your trust in our team and in our process. We were happy to have the opportunity to meet in person. The professionals whose named are at the bottom of this letter continue to work diligently for you. We appreciate your trust and confidence

The views stated are not necessarily the opinion of Cetera and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein.  Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed.  Past performance does not guarantee future results.

Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.


Jesse Hurst - Chair, Impel Wealth Management

Nathan Ollish - Impel Wealth Management

Clint Gautreau, Horizon Financial Group

Kevin Myers, ATL Global

Joy Schlie, FHT Financial Advisors

Dusty Green, Spencer Financial Inc.


Jesse W. Hurst, CFP®, AIF®
Financial Advisor

*Award Recipient Jesse Hurst 

*The 2021 ranking of the Forbes’ Best–in–State Wealth Advisors1 list was developed by SHOOK Research and is based on in–person and telephone due–diligence meetings to evaluate each advisor qualitatively and on a ranking algorithm that includes client retention, industry experience, review of compliance records, firm nominations, and quantitative criteria (including assets under management and revenue generated for their firms). Overall, approximately 32,725 advisors were considered, and 5,000 (approximately 15.3 percent of candidates) were recognized. The full methodology2 that Forbes developed in partnership with SHOOK Research is available at

1 This recognition and the due–diligence process conducted are not indicative of the advisor's future performance. Your experience may vary. Winners are organized and ranked by state. Some states may have more advisors than others. You are encouraged to conduct your own research to determine if the advisor is right for you. 

2 Portfolio performance is not a criterion due to varying client objectives and lack of audited data. SHOOK does not receive a fee in exchange for rankings.