Broker Check

Investylitics Monthly Report August 2021

Horizon Advisor Network Investment Committee August 23, 2021

Executive Summary

  • Recent economic data is somewhat mixed, with hard data such as PMI's and employment data showing continued improvement, while sentiment indicators have been weaker primarily due to an uptick in COVID cases and fading stimulus.
  • Inflation readings have proven to be stronger and are lasting longer than what the Federal Reserve Bank initially expected. Consumer inflation expectations have moved up to their highest levels in many years.
  • We believe that the economy has moved from its initial recovery stage to a mid-cycle expansion. The committee is continuing to examine how to implement this thought process in both our portfolio allocation.
  • With markets near all-time highs and market breadth narrowing, the risk/reward profile in the near-term points to a more cautious stance. We believe there is a strong chance that volatility could pick up in the second half of the year.
  • We would like to remind clients who are taking monthly withdrawals, required minimum distributions, or have needs for cash over the next 6-12 months, that this is a reasonable time to create any needed liquidity.

The five members of our national investment committee had a virtual meeting on the afternoon of August 16th.  There has been a lot going on from both a political and economic standpoint, and we were happy to have the opportunity to share information and review relevant data points.

The committee began by reviewing the economic and investment strategy outlooks from the seven teams we currently follow.  There is a general perception that markets are somewhat overbought on a near term basis, that some momentum is fading, and that the risk/reward profile of the market does not look as constructive in the near-term.

It appears as though the economy has shifted from a recovery phase to a mid-cycle expansion phase. From a historical standpoint, this phase could last several years before fears of recession would begin to weigh on our investment holdings and portfolio structure.  Against this backdrop, recent economic data has been somewhat mixed.  Hard data, such as the PMI indices for both the manufacturing and services side of the economy, showed evidence of strong growth during the month of July. The unemployment report showed more than 940,000 new jobs created and the unemployment rate dropping to a post pandemic low of 5.4%.

At the same time, a new wave of COVID-19 cases led by the Delta variant, enhanced unemployment benefits running out in September, and the last round of stimulus checks fading into the past, has led to sentiment indicators moving markedly lower over recent weeks.

We also know that the Federal Reserve Bank is navigating a somewhat difficult landscape these days.  By many measures, inflation has been higher and is lasting longer than what the Fed originally expected.  At the same time, they continue to tell us that these readings are elevated due to transitory factors, and that inflation should come back down over the next few months or quarters.

Against this backdrop, consumer inflation expectations have moved up to their highest level in many years.  This could change consumer behavior. This, along with a wage growth, which tends to be a stickier type of inflation, could make some inflation pressures more than just transitory.  This is something the committee will continue to watch, as it could have significant impact on the type and duration of bond holdings we hold within our models.

The committee was pleased to report that the portfolios managed by the committee have continued to perform in line or above their risk adjusted, indexed based benchmarks over the last one, three, and five years.  We are cognizant that markets are near all-time highs, and a number of underlying indicators are showing weakness and market breadth is narrowing. In the short-term, this would lead us towards a more cautious stance.  If you have money to deposit, we believe it makes sense to dollar cost average into the market over several months, versus risking buying at an all-time high.

We also remind clients who are taking monthly withdrawals, required minimum distributions, or have liquidity needs over the next 6 to 12 months, that now is a reasonable time to create this cash. This would help mitigate the risk of short-term volatility or market dislocations.  The committee believes that given the current political and economic backdrop, we could certainly see a pickup in volatility in the second half of the year.

Thank you for your continued trust in our investment committee’s systems and processes. Our team will continue to work diligently to maintain your confidence, and to manage your hard-earned resources. Should you have any questions regarding these notes, please do not hesitate to reach out to your advisor.

Thanks, and have a great day.

The views stated are not necessarily the opinion of Cetera Advisors LLC 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.


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


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.