Market Commentary

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Summer 2021

As we enter the warmest days of the year, we are reminded that the markets have followed suit, heating up through the mid-point of 2021. In our opinion, it has been a year of re-birth for the economy. After the complete shuttering of our own and nearly every other economy around the world last year, we are pleased to recognize the recovery that is        presently underway. Vast employment openings seen across the country signal room for growth as restrictions subside and people return to work. The unfolding of these unprecedented times, including the evolution of the COVID economy, has been fascinating to watch. Work-from-home requests have caused a boom in the housing market as people depart high-cost urban areas across the United States in record numbers. Equality, compensation, and benefit increases have been brought to the forefront of employment discussions as leading factors in the economic transformation underway. The renewed appreciation originally showered upon the much-deserved first responders and healthcare workers during the height of the pandemic is now moving throughout entry level and minimum wage positions in retail, manufacturing, and food service industries. We are grappling with the best way of rewarding, incentivizing, and retaining individuals who work in these positions that most would agree have been somewhat taken for granted. As the public and private   sectors work together to address these issues, it is highly probable that the outcome will have a profound and meaningful impact on those at or below the poverty line. This is a sign of things to come, and all part of this economic transformation. Taking a long-term view, as we do, a strong argument could be made that these changes will truly change the world.

Inflation and unemployment have led much of the

economic discussion in the past few months. We have

watched as the price of commodities, housing, stocks,

and living expenses have increased. Some of these are

minor and not likely a long-lasting change, such as

lumber and automotive production. Both industries

witnessed soaring prices but have since settled down as

supplies—wood and computer chips—rebalanced with

demand. In addition, we are seeing persistent unemploy-

ment. There is debate whether this is due to excessive

unemployment subsidies, concerns over COVID, or a

lack of competitive wages. As is usually the case, it is

likely a combination of each of these items. As can be

seen in the JOLTS Chart (Image 1), unemployment is a

problem that needs to be resolved particularly as

businesses are in desperate need of workers. It is

difficult to say whether these issues are structural or

temporary, but our best guess is that it is likely the

latter—the result of an economic reawakening. Most

data shows that the average consumer is in a much-

improved position than pre-pandemic, and arguably a

better position than in the past decade. Stimulus dollars

and the inability to travel, dine out, or comfortably make

large purchases has led to individuals paying off debt,

increasing their reserves for emergencies, and being in a

position of power as it relates to negotiating salaries due

to unprecedented labor shortages. Some of this excess cash has also gone into investments, which has propelled the U.S. stock market to all-time highs. In short, the economic and market decline was swift and scary, but the recovery has been the same in many respects.

Image 1

JPM Guide to the Markets—U.S. Data are as of June 30, 2021.

Market Commentary

Looking at where we stand so far this year, we find the Dow, S&P 500, and all the broad Russell indices positive by more than 15% as of mid-July. International markets have been less robust with the MSCI Emerging Market Index positive just 3.37%. Europe has fared better as the MSCI EAFE is positive 9.61%. Bonds are down 1% nearly across the board apart from municipals, which are positive 1.24%. Rising interest rates paired with a very low bottom to start the year has led bond holders to experience little or no appreciation, which is normal given the environment. Although a much lower risk asset class and diversifying vehicle, it can be said that bonds in general have been a net detractor from portfolio performance thus far in 2021.


As we move toward fall, coming off a strong first half of the year, it is safe to assume that the remainder of this year will be more volatile than the first half for several reasons. The first being the unusually low volatility experienced in the first half of the year—i.e., it cannot be much calmer than it has already been. In addition,   pending tax reform could push investors to lock in equity gains in 2021 as opposed to potentially paying higher tax rates in the new year. Lastly, investors may find that they are content with the returns they have achieved thus far and are not willing to risk losses as the economy continues shifting into a new environment. This is typical  behavior of the investment community when markets are at or near historically high levels. From our vantage point, the economy appears to be highly supported by the Federal Reserve at this time and with job openings, higher starting wages, and a lot of cash on the sidelines ready to be deployed, we expect additional positive returns on invested capital through the end of this calendar year.

As always, we thank you for the commitment you have made to us and the trust you have instilled in our team. If you have any specific questions or concerns, please do not hesitate to contact us.

Office Updates

Our office is open, albeit we continue to take a flexible approach for the sake of our clients and staff. We are happy to accommodate Zoom meetings and phone calls for those still cautious about in-office visits, but have enjoyed welcoming back the smiling faces into our office.

In May we welcomed our newest staff member, Samuel Ohland, to the team. “Sam” is a Schoolcraft native and Western Michigan University graduate where he achieved his Personal Financial Planning degree. He will primarily be working with Todd, Tami, and Liz on our client service team. We are excited to introduce him to you during your next visit.

Todd is very proud to announce the marriage of his daughter, Alyssa, to her long-term partner, Aaron. They were married this month at his home on Lake Michigan. It was a beautiful day filled with love, family, and faith.

Disclosure: Sanford Advisory Services, LLC (“Sanford Advisory”) is an SEC registered investment adviser located in Portage, Michigan.  Sanford Advisory may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Sanford Advisory does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. The S&P 500 is an unmanaged index of 500 widely held stocks that's generally considered representative of the U.S. stock market. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow”, is an index representing 30 stocks of companies maintained and reviewed by the editors of the Wall Street Journal. The NASDAQ Composite Index is an unmanaged index of securities traded on the NASDAQ system. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks. The MSCI EAFE (Europe, Australasia, and Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the United States & Canada. The EAFE consists of the country indices of 22 developed nations. The Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. Keep in mind that individuals cannot invest directly in any index. Index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results. Raymond James does not provide tax or legal services.  Please discuss these matters with the appropriate professional. Links are being provided for information purposes only. Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices rise.  RMD’s are generally subject to federal income tax and may be subject to state taxes.  Consult your tax advisor to assess your situation. A copy of Sanford Advisory’s current written disclosure Brochure discussing Sanford Advisory’s business operations, services, and fees is available from Sanford Advisory upon written request.