Quarter endings and beginnings are typically a good time to provide a touchpoint with your clients and prospects, so in recognition of the change of calendar, we wanted to give you a sample newsletter to aid you with this communication. You want to let your clients know that you are holding the reigns of their portfolios and that you are holding on tight. This letter has not been FINRA approved.
Quarter endings and beginnings are typically a good time to provide a touchpoint with your clients and prospects, so in recognition of the change of calendar, we wanted to give you a sample newsletter to aid you with this communication. You want to let your clients know that you are holding the reigns of their portfolios and that you are holding on tight. This letter has not been FINRA approved.
Note to Wells Fargo Advisors: A version of this letter has been submitted to Wells Fargo compliance for CAR approval. Once it is approved, we will put the CAR # in the "Were You Aware?" section of the Daily Equity Report.
Sample Client Newsletter: Q4 2021
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The fourth quarter and 2021 are now officially in the books. After a rocky end to the third quarter, US equities quickly rebounded in October. Aided by generally strong earnings reports, the S&P 500 and Nasdaq each gained around 7% for the month, with the Dow posting a gain of nearly 6%.
US equities’ strength carried through into November with the S&P 500 reaching new all-time highs. However, the emergence of the omicron COVID-19 variant and concerns about the efficacy of existing vaccines sent stock prices and bond yields tumbling post-Thanksgiving.
While the emergence of the omicron variant pushed stocks lower, it took a larger toll on oil prices, which declined more than 10% the day after Thanksgiving, the largest one-day decline since April 2020, leading to a loss of more than 20% for the month.
In remarks the following week, Fed Chair Powell struck a more hawkish tone further unnerving equity investors. Powell said that it was no longer appropriate to call inflation “transitory” and, citing the strength of the US economy, said that a faster tapering of asset purchases was under consideration, The S&P 500 finished the month down slightly, posting a loss of -0.83%. Small-cap stocks were hit harder as the Russell 2000 lost nearly 4.3%.
Fears about the omicron COVID-19 variant subsided as data indicated that, while more infectious, the illness caused by omicron was less severe than other variants, and the S&P 500 ended December with a gain of more than 4% for the month.
Crude oil also rebounded as worries about omicron eased, gaining nearly 14% in December to finish 2021 up more than 55%, its best year since 2009.
The S&P 500 ended 2021 with a gain of just under 27%, its second-best annual return since 2013. Meanwhile, the Nasdaq and the Dow gained around 21% and 19%, respectively. This marked just the sixth year in which the S&P 500 outperformed both of the other major US benchmarks.
While 2021 was undoubtedly a positive year for US equities, rising interest rates were a headwind for bonds. The Bloomberg Barclays US Aggregate Bond Index was down about 1.7% in 2021, its worst year since 2013.
As we begin 2022, we continue to monitor closely for any shifts in the market landscape. Domestic equities and commodities remain first and second, respectively, in the relative strength asset class rankings of our Dynamic Level Investing (DALI) tool. DALI provides us with a heat map of where relative strength (and weakness) resides across and within asset classes. From a sector perspective, relative strength resides with technology and financials; the technology sector regained the top spot in the DALI sector rankings late in the year, finishing 2021 in the same position in which it began.
If you have any questions about your portfolio or you would like to become more familiar with my investment process and the tools I use to identify market leadership across and within asset classes, please don’t hesitate to contact me.
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Please be aware that the content of this newsletter is based on the opinion of Dorsey, Wright research and may differ from the research provided by your financial advisor. This market theme letter was written by Dorsey, Wright & Associates and is provided courtesy of your advisor.
The performance numbers in this article do not reflect transaction costs. Indexes are not available for direct investment. Past performance is not indicative of future results and there is no assurance that any forecasts mentioned in this report will be attained.
Stocks offer growth potential but are subject to market fluctuations. Dividends are not guaranteed; companies can reduce or eliminate their dividend at any time. There are special risks associated with an investment in real estate, including credit risk, interest rate fluctuations and the impact of varied economic conditions.
The information contained herein has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. Accordingly, investors should not act on any recommendation (express or implied) or information in this material without obtaining specific advice from their financial advisors and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources believed to be reliable (“information providers”). However, such information has not been verified by Dorsey, Wright & Associates, LLC (DWA) or the information provider and DWA and the information providers make no representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein. DWA and the information provider accept no liability to the recipient whatsoever whether in contract, in tort, for negligence, or otherwise for any direct, indirect, consequential, or special loss of any kind arising out of the use of this document or its contents or of the recipient relying on any such recommendation or information (except insofar as any statutory liability cannot be excluded). Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice. Neither the information nor any opinion expressed shall constitute an offer to sell or a solicitation or an offer to buy any securities, commodities or exchange traded products. This document does not purport to be complete description of the securities or commodities, markets or developments to which reference is made.
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