Pence Perspective

Pence Perspective | Q2. 2021 Download Here Intro The old adage “Don’t fight the Fed” has been incredibly accurate over the last year and we do not expect that to change soon. In our view, equities are still the best place to put money to work but we think investors should focus on owning quality companies, elevating their yield profile, and maintaining higher levels of cash to take advantage of dislocations as the economy proceeds to a broader recovery. There is a flood of money in the economy, which has led to historically elevated savings, spending, and [...]

Pence Perspective | Q1. 2021 Download Here Intro 2020 was a historic year. A once in a century pandemic, the fastest bear market in history, and the largest year-over-year drop in economic output since just after World War II. This was coupled with the quickest recovery from a bear market in history and a year that saw two successive records for household wealth despite the damage. While there is still a way to go, the recovery displayed so far has surpassed even the most optimistic expectations, and the Congressional Budget Office now expects the U.S. economy to [...]

Pence Perspective | Q4. 2020 Download Here Bottom Line Up Front: At the beginning of the year, there was a broad consensus on Wall Street that a Biden presidency was the largest looming risk to equity markets and existing valuations. Over the last month the market has taken a decidedly different tone. As former-Vice President Joe Biden’s general ballot lead has expanded - now sitting at eight points in the Real Clear Politics Average as of October 26 - markets have rallied around the likelihood of a “Blue Wave” and the prospect that has for [...]

Pence Perspective | Q3. 2020 Download Here Executive Summary: Despite hopes to the contrary, summer didn’t kill the virus. Today Covid-19 is far more widespread in the United States with higher numbers being announced every day than at any point in the shut down over March and April. Despite this, the impact hasn’t been nearly as pronounced. Jobless claims, though still extremely elevated historically, have shown a reasonably consistent downtrend in magnitude and economic data to date has been resoundingly positive. As of August, we have over 18 million data points with which to base [...]

Pence Perspective | Q1. 2020 Executive Summary: 2019 was one of the greatest years for stocks. The S&P 500 was up 28.9% (or 31.5% including dividends), the second highest return since 1997 or fifth highest return since 1958. For 2020, we expect between high single-digit and low double-digit stock returns. We see fewer headwinds in 2020 compared to last year which may favor stocks over bonds. “Phase One” pact between the U.S. and China is done. Brexit is almost over. The global growth slowdown probably bottomed in 2019. The Fed is on hold, meaning we expect mortgage rates [...]

Pence Perspective | Q1. 2020 Clear Eyes, Steady Hands Executive Summary: We think 2019 will be a positive year for stocks but expect continued market volatility We expect one rate hike from the Federal Reserve in 2019 We do not expect a recession in the United States in 2019 or 2020 We expect a short-term resolution on trade tensions Bottom Line Up Front: A good economy and a bad market don’t coexist for long. However, share prices can fall for many reasons other than economic developments. Good economic news and robust corporate earnings reports powered the S&P 500 to its all-time high on September 20, where it [...]