2006 4th Street
The Horizon Advisor Network Investment Committee met on the afternoon of May 17th, 2021. All six members of the team were present and had an opportunity to share updates and insights on what was going on with our model portfolios, as well as the economic and investment outlooks of the various strategists and economic teams that we follow. We are happy to report, that the model portfolios tracked and managed by the committee members continue to perform in line or above their risk-adjusted index-based benchmarks, over the most recent one, three and five years. Recent economic reports continue to show a strengthening economy. The combination of continued re-openings, the successful roll-out of the vaccines, along with the Federal Reserve maintaining low interest rates, and additional stimulus from Capitol Hill is causing economic activity to grow at a pace we have not seen in nearly 40 years. Unfortunately, there are a number of employment and supply chain constraints and disruptions that are causing upward pressure on inflation. The April jobs report was largely disappointing. There were only 266,000 new jobs created. This is against a backdrop of nearly 1M jobs expected. The unemployment rate unexpectedly rose to 6.1% instead of dropping to 5.8%, as forecast. This is largely due to the fact that employers are having a hard time enticing workers back to their jobs. This comes from a combination of enhanced unemployment benefits and residual fears around the COVID-19 coronavirus. The most recent JOLTS report from the U.S. Bureau of Labor Statistics showed that there are a record number of more than 8M jobs available and unfilled in the US currently. In addition to this, supply chain disruptions are causing prices on most goods, and some services to rise, more quickly than we have seen in many years. The 0.8% increase in CPI on a month over month basis was the fastest rate of growth since 1981.
There is substantial debate among economists about the outlook of inflation. The majority believe that we are entering a new era where inflation could be elevated at 3%-4% or more for several years or more. This seems to be the consensus view at the present time. While nobody is talking about the late 70’s style hyperinflation, we have not had inflation at this level in many years. However, there is a smaller but very vocal and very well experienced group that agrees with The Federal Reserve Bank. They believe that inflation will be short lived and transitory due to the one-time effects of economic stimulus wearing off, aging demographics globally, lower birth rates, and the continued disinflationary impact of technology over time. While nobody knows who will be right, we will continue to watch this, and will be able to make adjustments if and when necessary. The committee believes that maintaining your age and risk based appropriate asset allocation is important. It is important to rebalance your portfolio on a regular basis to make certain that your risk does not get out of line. We also believe that as markets hit new all-time highs, you should look at this as an opportunity to create cash for any of your short term to intermediate needs. We believe that the political and economic backdrop and uncertainty will continue to lead the bouts of volatility. It is very important in times like this, where we are seeing economic growth and inflation at levels we have not seen in 30 or 40 years, to have a strong economic, investment and historical context to make wise decisions. The committee takes this responsibility seriously and will strive to be well informed. Our aim is to help you build and protect your assets in a prudent manner. 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 in this letter are not necessarily the opinion of Cetera Advisors LLC and should not be construed directly 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 GlobalJoy Schlie, FHT Financial Advisors
Sincerely,Jesse W. Hurst, CFP®, AIF®CERTIFIED FINANCIAL PLANNERTMFinancial 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 www.forbes.com.
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.