What's Investing Got To Do With It?

June 13, 2022

With so much bad news in the market, with talk of a global recession and a no growth decade for the stock market, what are we to do about investing?  What has served us well since 2008 may not work in this market now.

The CPI report on Friday showed that inflation rose 8.6%, the highest rate since 1981, with shelter inflation high, which is one third of the index.  Easing supply chain restraints and releasing oil reserves are key to the government’s response.  Selling was widespread.

The Atlanta Fed’s GDP Now tracker shows the U.S. economy could be headed for a second consecutive quarter of negative growth, meeting the technical definition of a recession.

The likelihood of a global recession, first in Europe seems more likely, as the war in Ukraine continues to tighten a chokehold on the world’s food supply and slow productivity worldwide.

What does this mean for investing?

Due to elevated valuation metrics and serious geopolitical risks, as well as a higher household ownership of stocks, supply chain disruptions and margin and regulatory risk will affect the markets dramatically - more so than in the last twenty years.

After the Dot Com bubble and through the Great Financial Crisis of 2008, we saw 20% downward counter trends. The average annual return of 13% in the 2010’s (makes us feel old, right?) may not be attainable and note that the average annual return during the 2000’s was -0.9%.

What to do?

Make no mistake, passive investing will suffer.

Buy and Hold portfolios, will not increase the likelihood of success, even with the advantage of the baskets of issues in Exchange Traded Funds. We have been selling into these rallies consistently, actively moving assets into cash and income generating securities for safety during this volatile and unpredictable time. V

Who should worry?

Twenty-year market cycles tend to do better than ten-year cycles. If you are one of our younger Emerging Investors (sign up for information about our Emerging Investor program here ) your portfolio will be able to stand the test of time and investing comes with the added benefit of dollar cost averaging. Retirement account investing such as 401(k)’s will require special attention and should not be allowed to sit passive in fund choices.

Our clients closer to retirement still have a growth component to their portfolios but great attention is paid to hedging the portfolio for market downturns and will be more heavily invested in select income producing securities. This itself requites diligence as the choice for fixed income is not as simple as it once was. Decisions such as present and future tax brackets, the impact of rising interest rates and future income needs must be carefully considered.

Every one of our portfolios is put through rigorous risk metric testing where we assess the client’s lifetime risk as well as the expenses charged on every level in the portfolio. For many clients, we use planning software to gauge the impact of potential market returns and risks in the future. This is available to all clients.

Many of our clients are choosing to either age in place or move to facilities when they may require more assistance in everyday living. In both cases, special attention is paid to providing for the continued and often expensive cost of care. We work closely with many families to ensure that their loved ones are safe, both financially and personally. Elder Abuse fraud is rampant and getting worse and we collaborate with clients to minimize this risk for our older clients.  We have resources to assist you with assessing elderly client risk.

Our tag line ‘Wealth Management for Life” reflects this comprehension of the parts of clients lives as it pertains to the whole. This is the definition of holistic that we see in many places related to financial advising. Its more than a term - it is a way of life for us, of interacting with our clients and their families on a meaningful level.

Markets, Geopolitics, and Recent Volatility

January 21, 2026
Recent market headlines have been driven less by economic data and more by geopolitics. In particular, renewed discussion around Greenland and its strategic importance has introduced a new layer of uncertainty into global markets. Greenland matters not because of its size or population, but because of its location and resources. It sits at a critical crossroads between North America and Europe, plays an increasingly important role in Arctic shipping routes, and holds significant reserves of rare earth minerals that are essential for technology, defense systems, and energy infrastructure. As global competition for these resources intensifies, Greenland has become a focal point in broader strategic and trade discussions. Markets reacted quickly to this uncertainty. U.S. stock indexes moved lower in a broad selloff, with technology shares leading the decline. At the same time, investors shifted toward more defensive assets, pushing volatility higher, lifting gold prices, and pressuring risk-oriented assets such as cryptocurrencies. Similar caution was reflected in overseas markets as well. When geopolitical issues intersect with trade policy, markets tend to respond swiftly. Even the possibility of changes in tariffs, trade relationships, or diplomatic alignment can influence assumptions about global supply chains, corporate earnings, and economic growth. That is what markets have been digesting. These developments are now a regular part of the global environment. Markets today must absorb not only interest rates and earnings reports, but also geopolitical strategy, resource security, and shifting alliances. This can create short-term market adjustments as investors reassess expectations. Geopolitical uncertainty does not automatically translate into lasting economic damage. Markets have navigated trade disputes, diplomatic standoffs, and strategic realignments many times before. Over time, clarity emerges, negotiations evolve, and economic activity adapts. We continue to watch these developments closely and view them as part of the broader global backdrop in which markets operate. While the headlines may feel new, the underlying dynamic of markets responding to geopolitical uncertainty is familiar and expected. If you have questions about how global events fit into the bigger picture, we are always available to talk them through. Understanding the context behind the headlines is often the most effective way to stay grounded when markets react to evolving global issues.

The Policy Pivot: Key Takeaways for Investors

December 11, 2025
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Finishing 2025 Strong: Key Trends to Watch

December 1, 2025
As we move into the final month of 2025, markets are adjusting to a new mix of encouraging economic trends and lingering uncertainty. November ended on a softer note, but December has opened with improved sentiment, clearer expectations around Federal Reserve policy, and a more confident tone in both equity and fixed income markets. Investors are watching these shifts closely, and the weeks ahead will help determine how the year ultimately finishes. At Affinity Capital, we continue to see an environment supported by quality leadership, steady earnings, and more attractive income opportunities. At the same time, late-cycle pressures and uneven economic data remind us that thoughtful risk management remains essential. A More Constructive Tone to Start December December began on firmer footing after several weeks of mixed performance. The most significant driver has been the market’s growing conviction that the Federal Reserve is getting closer to the start of a rate-cutting cycle. Current pricing suggests a meaningful chance of a cut in the near term, which has helped lift sentiment across equities and high-quality bonds. This optimism has also supported areas that tend to benefit from lower yield expectations, such as precious metals and rate-sensitive parts of the market. While not a guarantee of what comes next, the shift toward more accommodative policy expectations has created a more balanced backdrop than we saw earlier in the fall. Economic Data Remains Mixed Despite the improved tone, the incoming data continues to show pockets of weakness. Manufacturing activity has contracted for another month, hiring momentum has slowed, and consumer spending has moderated from its pace earlier in the year. The recent government shutdown delayed several economic releases, and the catch-up process has added some short-term noise to the data stream. What stands out is the contrast between a resilient corporate earnings picture and a softer macro environment. Many large companies continue to report healthy margins and steady demand, yet the broader economic indicators suggest that growth is losing some steam. This type of divergence is typical in late-cycle phases and often results in more frequent market swings. Volatility Has Picked Up After months of historically low volatility, markets have begun to experience more frequent fluctuations. Concerns around artificial intelligence valuations, regional banking stress, and geopolitical developments have all played a role. Volatility is not necessarily a sign of structural weakness, but it is a reminder that investors should expect a less predictable finish to the year. For diversified portfolios, these swings can create opportunities to rebalance, harvest gains, or add exposure to areas that have repriced more attractively. They also highlight the importance of high-quality holdings that can withstand periods of uncertainty. Opportunities Across Equities and Fixed Income Even with the mixed data backdrop, the overall investment environment remains constructive for long-term investors. High-quality U.S. companies with strong balance sheets and consistent earnings continue to provide stability at the core of portfolios. Select small-cap and mid-cap companies have also begun to show signs of improvement as rate expectations shift. In fixed income, today’s yields offer significantly more value than they did for much of the past decade. Bonds once again contribute meaningful income, and the possibility of lower rates in 2026 creates potential for price appreciation in high-grade credit. This combination strengthens the case for balanced portfolios that include both equities and fixed income. Positioning Into Year-End Given the current landscape, we believe the market is moving toward a finish that is neither overly exuberant nor overly cautious. Several key themes are likely to guide performance over the coming weeks. Quality leadership continues to play an important role, especially in sectors tied to innovation, cloud infrastructure, and digital transformation Broad market exposure remains valuable in capturing the benefits of seasonal strength and earnings resilience Dividend-oriented and defensive holdings support stability in late-cycle environments High-quality bonds offer attractive income and diversification benefits Small-cap and mid-cap allocations may provide long-term upside as rate expectations shift Looking Ahead As the year comes to a close, investors are balancing two realities. On one side, there is growing optimism around potential rate cuts, resilient corporate earnings, and improving seasonal patterns. On the other side, there are signs of slowing economic momentum, higher volatility, and continued geopolitical uncertainty. The result is a market that rewards discipline, diversification, and a focus on long-term goals. At Affinity Capital, our approach remains steady. We continue to emphasize high-quality holdings, balanced allocations, and thoughtful adjustments based on data rather than emotion. The coming months will bring new information, but the principles that guide long-term success remain unchanged. We are here to help clients stay aligned with their plans and positioned with confidence as we move into a new year.