Client Newsletter Q1 2022
Dear friends,
Just when it seems we were on the road to recovery from the pandemic, Russia decides to throw a wrench in the system and invade Ukraine. It’s difficult to watch the crisis escalate and impossible to predict the outcome. There will be far reaching effects felt by everyone, but for now the crisis seems to be contained with the USA facing fewer energy and supply issues than those in Europe.
This year started off poorly and volatility reared its ugly head bringing the market into “correction” territory (when the market drops 10%). The good news is our portfolios were well-positioned and outperformed the major indices. We accomplished this by sticking to our core philosophy of buying and holding quality investments. If you recall a year ago, there was an irrational exuberance around companies that posted huge gains in a matter of months. Those on the message boards talked about these stocks as the second coming. Today most are down anywhere from 60-80% as the Peloton, Teladoc and Zoom’s of the world fall to their pre-pandemic prices.
You may have noticed the spike in gasoline and food prices, this is due to inflation. While Fed Chairman Powell has committed to fighting higher prices by increasing interest rates, we don’t expect inflation to stop on a dime. While the Fed continues to increase rates to get increasing prices under control, there will be industries who benefit from the rising rates. Financials, Industrials, Materials, and Consumer Discretionary should benefit, these sectors are represented in your portfolio. Believe it or not, higher prices are a sign of a healthy economy, and it seems the consumer is in good position to weather this with household debt to GDP near decade low levels.
I’d like to deviate a bit to brag about my superstar team. Many of you have had a chance to interact with Debra Meyer, who has been with me since 2018. As Managing Director, Debra has provided invaluable client service and investment management, all while obtaining an MBA from Northwestern’s Kellogg School of Management. Debra and her husband Adam welcomed their beautiful baby girl, Daphne, on March 23rd.
Behind the scenes but quite visible if you have visited our offices, is a key member of our team Brad Price. With more than 20 years’ experience working in hedge funds, trust operations and institutional custody, Brad is a key player in portfolio design and tactical allocation for optimal returns.
Finally, we are thrilled to welcome Deana Lewis as Head of Client Experience. She has spent over 15 years within the financial service industry, with the last five years at Northern Trust Asset Management as Head of Intermediary Channel Marketing. Deana will provide strategic direction and oversight to the firm’s client service and communications. The formation of this role highlights our ongoing commitment to enhancing your experience with Moonstone Asset Management.
While we have been conducting fewer in-person meetings, our doors are open. If you anticipate changes to your personal financial situation or would like to discuss your portfolio, please feel free to contact me at knatkin@moonstoneasset.com.
Best,
Investment Advisory services offered through Moonstone Asset Management, Inc. a registered investment adviser
Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.
This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.