812-853-0878  |  800-355-9624

July 1, 2021

Dear Client: Year-to-date returns for the major stock indices and the current bond and money market yields are as follows: IndexYTDDow Jones Industrial Average   12.73%S&P 500   14.41% Fixed Income Yields1 year5 year10 year30 yearMunicipals0.14%0.51%1.00%1.58%US Treasuries0.07%0.88%1.46%2.08% Fidelity Government Cash Reserves Money Market Fund0.01% Happy 4th of July!  As we again celebrate the birth of our nation, we would like to reflect on the strong first half of 2021 in the equity markets.  Any way you slice it, the equity markets are doing well as every sector of the S&P 500 is positive for the year.  If you are a holder of equities, you are generally pleased; every equity style, from value to growth to foreign, is performing.  The vaccines are working, and the virus is becoming less of an issue for equity markets with each passing day.  The American economy (as measured by GDP) is on pace for its best year-over-year growth since 1984, and pre-tax corporate profits are back to all-time highs.  American consumers and corporations are flush with cash, and the pent-up demand is unwinding into the economy.  Combine all of this with an asset-friendly Federal Reserve Bank committed to low interest rates, and you have higher stock prices and an economy ready to roar. As we often communicate, looking backward is always easy, evaluating the present can be challenging, and prognosticating the future is even more difficult.  As investors, we live in unusual times.  We have had a litany of unprecedented and rare events: from shutting down the economy, to enormous stimulus packages, to unemployment rising from 3% to 14% in weeks, to the Fed increasing the...

April 1, 2021

Dear Client: Returns for the major stock indices for 2021 and the current bond and money market yields are as follows: Index        YTDDow Jones Industrial Average   7.76%S&P 500   5.77% Fixed Income Yields    1 year5 year10 year30 yearMunicipals  0.10%0.50%1.08%1.81%US Treasuries  0.06%0.93%1.73%2.40% Fidelity Government Cash Reserves Money Market Fund0.01% The first quarter of 2021 is off to a good start for the equity markets.  First and foremost, COVID cases are falling precipitously, and the vaccines are proving to be a huge success.  Though the numbers seem to vary, we believe that between the vaccines, the number of counted cases, and the CDC’s estimated unreported infections, nearly 70% of Americans have some form of antibodies.  And though we certainly do not know the final outcome of the new strains or whether the vaccines will permanently end all variations of the virus, we believe the worst is most likely behindus and that herd immunity will soon be here in 2021; and the great re-opening of America is underway!  While we remain optimistic for the year ahead, we believe as long-term investors, it is constructive to reflect on the last year.  We all remember too well how we felt one year ago, when the world nearly stopped in the uncertainty of the virus.  In the depths of the fear, no one knew how severe the virus would be and to what extent the economic engine would slow.  This fear caused panic and led to extreme behavior, leaving some companies booming while others ground to a halt.  The world was in disarray, and markets never stopped discounting and adjusting for every possibility.  Amid the uncertainty, we wrote:...

January 1, 2021

Dear Client: Returns for the major stock indices for 2020 and the current bond and money market yields are as follows: Index         2020Dow Jones Industrial Average     9.72%S&P 500   18.40% Fixed Income Yields1 year5 year10 year30 yearMunicipals0.13%0.22%0.69%1.47%US Treasuries0.10%0.36%0.91%1.64% Fidelity Government Cash Reserves Money Market Fund0.01% Happy New Year!  Believe it or not, markets are back to all-time highs.  Despite all the problems of 2020, we have again weathered the storm as investors.  As we know too well, the panic from the virus created havoc for countless lives, businesses, and livelihoods.  We have all dealt with the effects of the virus within our own families; the stress and effects are real and challenging.  As for the markets in 2020, the fear and panic created one of the greatest market opportunities of all time.  The major market index (S&P 500) has rallied 70% since the March 23rd low.  During this recovery, the markets also gave us an 8% decline in June, an 11% decline in September, and a 9% decline before the election in October.  Through it all, long term investors again logged a positive year in the markets.  Once again, the day-to-day grind of market volatility, along with all the stresses related to the virus, made perseverance as difficult as ever. We believe the momentum in the current bull market has legs into 2021 for many reasons.  First and foremost, the virus is being conquered through vaccines.  We believe the rollout will transpire better than expected, and every American will have access to the vaccine in 2021.  The heroes in American private industry met the call, as drug companies like Moderna...

October 1, 2020

Dear Client: Returns for the major stock indices for 2020, and the current bond and money market yields are as follows: Index3rd QuarterDow Jones Industrial Average   -2.65%S&P 500   4.09% Fixed Income Yields1 year5 year10 year30 yearMunicipals0.13%0.29%0.84%1.67%US Treasuries0.12%0.28%0.68%1.46% Fidelity Government Cash Reserves Money Market Fund0.01% For two weeks leading into September, the S&P 500 was again making new all-time highs; a truly remarkable climb (60%) from the March 22nd lows.  The month of August tallied a positive 7.19% return followed by a September decline of 4.32%.  Clearly, volatility is here again after a very strong and steady climb in 2019.  We all know the recent history by now: a once in a several generation pandemic and unprecedented government responses caused the markets to panic, and in just a matter of weeks dropped by 33%.  Undoubtedly the pandemic and ensuing reactions created an indelible impact on many businesses.  Through August, there have been 180 bankruptcies, each with liabilities of over $50 million.  In total, it is estimated nearly 100,000 businesses will never return.  There are many examples and statistics available to illustrate the economic destruction left in the wake.  Unfortunately, the damage is still being uncovered, and despite huge gains recently in growth and jobs, a full recovery is likely still years away. At LYNCH & Associates, we believe that despite the challenging year of 2020, the markets have held up reasonably well.  We are happy that nearly all of our clients participated in the recovery and did not partake in any significant market timing.  Certainly, each client is unique and has varying risk tolerances and goals, but the vast majority...

July 1, 2020

Dear Client: Returns for the major stock indices for 2020, and the current bond and money market yields are as follows: Index2nd QuarterDow Jones Industrial Average  -9.55%S&P 500   -4.04% Fixed Income Yields1 year5 year10 year30 yearMunicipals       0.21%0.46%0.86%1.70%US Treasuries        0.15%0.29%0.66%1.41% Fidelity Government Cash Reserves Money Market Fund0.01% So far, 2020 has been quite a tumultuous year; and we are only halfway through!  As we all know too well, the decade-long bull market came to an abrupt halt in February as COVID-19 created a nearly unprecedented type of fear and great uncertainty.  In the fog of the times, traders panicked and pushed the markets down 33 percent from the all-time highs.  As we remember, there were no easy answers for investors.  In March, we wrote that everything we have ever understood about investing is not to panic, and not to overreact.  We know that trying to time the market is difficult, and just when the fear is at its highest, the markets can turn quickly without pause; and sure enough, March 23rd marked the beginning of the best 50-day rally in market history.  As the markets recorded their best quarter since 1998, the age-old contrarian axiom to “buy when no one wants them and sell when everyone wants them” again proved to ring true.  We have again been reminded that truly buying low is always difficult because the fear and uncertainty are at their highest and this time was no exception. Undoubtedly, we live in unusual times, and with investing it is no different.  These markets have many of the most respected voices on Wall Street voicing an array of differing...

April 1, 2020

Dear Client: Returns for the major stock indices for 2020, and the current bond and money market yields are as follows: Index1st QuarterDow Jones Industrial Average   -23.20%S&P 500   -20.00% Fixed Income Yields1 year5 year10 year30 yearMunicipals1.07%1.17%1.44%2.08%US Treasuries0.15%0.37%0.67%1.34% Fidelity Government Cash Reserves Money Market Fund0.15% We are all well aware of the latest market-moving news.  First, we hope this letter finds everyone healthy and safe.  We know it is an understatement to say that we are all impacted by the COVID-19 virus.  We are all confronted with similar challenges, primarily the question of what we should do to best protect ourselves and families from the threats of this virus.  These challenges range from healthcare concerns to employment and financial considerations and ultimately, how best to care for those we love.  The burdens are heavy, and the uncertainties can be overwhelming.  We know and empathize, as we feel it too.  As with all challenges in life, we have risks to measure, problems and opportunities to resolve and decisions to make. Fear, panic, and emotion; everything we have ever studied concerning making rational investment decisions has taught us to be mindful to not act on emotion.  We know that feelings and emotions are temporary, felt in real-time and spark internal responses associated with anxiety and fight-or-flight responses.  These feelings are real and they affect our behaviors, decisions and quality of life.  Though we are not medical experts and perhaps cannot well articulate the biological experience going on in times of stress, we can add some perspective on market history and reflect on how markets withstood other times of fear, panic and recovery....