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Investing In Action: Valuation Insights
Phil McManus
Chief Investment Officer

Our Insights

Second Quarter 2021

Normalcy appears to be returning to the U.S. as many of the restrictions have been lifted, allowing fans to attend professional sports, less masking requirements, and an increase in travel. COVID - 19 has challenged our way of life and most likely the way we live...

First Quarter 2021

We have surpassed the one-year anniversary of COVID-19 coming to the U.S. and disrupting our everyday life. It appears we are on an upswing given the vaccine distribution, despite the road bumps in acquiring vaccine appointments. In the first quarter of 2021, developed equity markets continued their strong...

Fourth Quarter 2020

Happy New Year! Now that we have finally turned the page on 2020, I hope you and your family are safe and healthy heading into 2021. Last year was difficult on many fronts: virtual learning for children, limited interaction with family and friends, working remotely, new spikes in COVID-19 cases globally, a contested election...

Third Quarter 2020

While we’ve made many life adjustments and sacrifices adapting to the new normal; working from home, remote learning, face coverings, and dining outside, COVID-19 remains active across the globe. At the time of this writing, we are seeing spikes in the virus globally with Israel, France, Britain, Spain, and various states in the...

Second Quarter 2020

These past three months have tested our patience, resolve, ingenuity, and tolerance. Comparing COVID-19 to a global natural disaster is a plausible comparison- an event that rapidly destroyed an area and rebuilding is needed to bring a community back to normal. However, normal is being redefined. The rules have been rewritten...

Third Quarter 2019

Equity and fixed income markets continue to display amazing resiliency three quarters of the way through 2019.  The S&P 500 index advanced 1.7% and the Bloomberg Barclays US Aggregate Bond index gained 2.27%.  Despite the occasional air pocket, the risk trade reigned supreme through the first three quarters of 2019. 

Second Quarter 2019

Financial markets continued to defy gravity in the second quarter of 2019. Stocks were up, bonds were up, and gold jumped over 9%. As noted in the first quarter letter, the Federal Reserve continues to maintain a decidedly dovish tone.  The bond market is pricing in a 100% probability of at least 25 basis point cut by the...

First Quarter 2019

After a horrific conclusion to 2018, the equity markets posted strong returns in the first quarter of 2019. The consensus is that the majority of the volatility in the fourth quarter was attributable to the rising interest rate environment. The Federal Reserve got the memo – recent language from the Fed is decidedly more...

Fourth Quarter 2018

Last January’s 5.7% return for the Standard and Poor’s 500 Index now feels like a lifetime ago. Investors were still giddy about the prospects for Bitcoin, the federal tax cuts were to propel earnings growth into perpetuity, the “Trump Bump” was in full effect and the one-month US Treasury yield was still only 1.4%. Our 2017 year-end... 

Third Quarter 2018

We hope this letter finds you well. Last month marked the tenth anniversary of the collapse of Lehman Brothers and the onset of the worst financial crisis since the Great Depression. A decade later, US equity markets are at all-time highs, the domestic economy appears to be on a strong footing and the Fed continues to...

Second Quarter 2018

We hope your summer is off to a great start. As we noted last quarter, some normalcy has returned to the capital markets following an eerily quiet 2017. We expect that the reemergence of volatility in both equity and fixed income markets, as witnessed in the first six months of this year, will continue for the rest of 2018...

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First Quarter 2018

The only thing more volatile than the New England weather during the first months of 2018 may have been global financial markets. Volatility returned with a vengeance, first in February, and then again in late March. With US equity markets experiencing selloffs not seen in years, the complacency that defined 2017 came to an...

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Fourth Quarter 2017

Happy New Year from Wealth Management at Century Bank! We hope this letter finds you well. It seemed like 2017 had a decade’s worth of newsworthy events packed into twelve short months. Despite all the political polarization, rising geopolitical tensions and a scaling back of easy monetary policy, capital markets had a banner year. Volatility was subdued throughout 2017 and stock markets rewrote the record books as the bull market marched on....


Third Quarter 2017

We are now three-quarters of the way through 2017 and capital markets continue to impress us—in both good and bad ways. US stock markets posted multiple record highs over the course of the quarter with the S&P 500 returning 4.48%. Global equities, as measured by the MSCI ACWI Index, were up 5.18%. Both the Bloomberg Barclays US Aggregate Bond Index and the Bloomberg Barclays Global Aggregate Bond Index posted positive returns for the quarter, up 0.85% and 1.76%, respectively....


Second Quarter 2017

Equity markets continued their impressive 2017 performance in the second quarter, although markets cooled off over the course of the most recent 3-month period, particularly in June. For the first six months of 2017, the S&P 500 Index is up 9.34%. After a posting a return of 6.07% in the first quarter of the year, the S&P 500 returned 3.09% in the second quarter, including a 0.62% return in June. The MSCI All Country World Index followed a very similar pattern. The MSCI ACWI is up 11.48% this year, posting a second quarter return of 4.27% (6.91% in the first quarter), including a 0.45% return in June. Matching the torrid pace of the first quarter was unlikely, however when put together, the first half of 2017 has demonstrated the resiliency of the equity bull market. Strong corporate earnings over the next couple of quarters may drive markets to even higher highs in 2017, but the lack of volatility seen so far this year is unlikely to be replicated going forward. ...


First Quarter 2017

Both domestic and international equity markets continued their upward climb in the first quarter of 2017. The S&P 500 posted an advance of 6.07% while the MSCI All Country World Index rose 6.91%. Bond returns were also positive with the Bloomberg Barclays US Aggregate Bond Index rising a modest 0.82% while the Bloomberg Barclays Global Aggregate Index advanced 1.76%....


Price vs. Value

Famed investor Warren Buffett is prolific when it comes to offering insight about stock market valuations. "Price is what you pay. Value is what you get" is my favorite. There are many ways investors can assess the "valuation" of the stock market. Just as we compare prices for various goods on Amazon.com, stocks also come with a price tag. The most common valuation metric used for stocks is the P/E or price-to-earnings ratio. While other approaches are more appropriate for industry-specific analysis, such as price-to-book for banks, the P/E is a widely-accepted metric in assessing the overall stock market's valuation. A simple example of a P/E is the following: if a stock earned $2 per share last year and it is currently trading at a price of $40 per share, the trailing 'P/E' is 20. ...

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