As the last few weeks have shown, fear and optimism can have outsized impacts on market conditions. The unprecedented Wednesday morning selloff, followed by a rally not seen since 2008, has many investors uneasy.

We entered 2025 with a decidedly risk-on stance in our portfolios, reflecting an optimistic view of the strength of the overall US economy and a better-than-consensus outlook on the trajectory of corporate earnings.

In our September rebalance for nontaxable assets, we adopted a cautiously optimistic stance, decreasing risk slightly due to election uncertainties.

After the stock market rally in the first half of the year and amidst the uncertainty of the upcoming election, for assets without tax implications, we are reducing risk by trimming some of the overweight for our active positions.

As we enter the summer months, our existing bullish stance remains intact.

Our call to “buy the dip” in mid-October, amid the heat of a tumultuous three-month pullback, has aged well.

As we move into the 2nd half of 2023, equities have been resilient in the face of a number of events since March.

As we move forward in 2023, recent events continue to present mixed messages about the economy and future interest rate direction from the Federal Reserve Bank.

After a year of defensiveness to protect against losses from both stock and bond markets, we believe 2023 will require a different strategy.

October update from the Buttonwood Financial Group Investment Policy Committee. Inflation has continued to be the dominant theme for market prices and monetary policy throughout 2022.

With recent headlines full of stores about elevated prices and supply chain issues, central bankers today face a stark trade-off as they race to raise rates and contain inflation...

As we provide answers to questions related to news headlines, we do so with a lens toward the impact on the economic cycle. Get the cycle right, and you will be miles ahead.

An active world calls for proactive asset management:  Buttonwood’s core investment allocations are designed to take advantage of longer-term investment views with the flexibility to take advantage of shorter-term trends. We believe combining these strategies will allow us to produce a more consistent rate of return through economic cycles.    Following lockdowns, in early 2020 we [...] The post Buttonwood Investment Policy Committee Update – March 2022 appeared first on Buttonwood Financial Group, LLC.

Frustration: Covid and Inflation Following historical trends of early economic cycle returns, on the back of low interest rates and economic stimulus, the S&P 500 once again posted solid gains in 2021. As 2022 rolled in, increasing concerns about the future of the economy had investors in a mood to take profits. Buttonwood’s core investment [...] The post Buttonwood Investment Policy Committee Update – February 2022 appeared first on Buttonwood Financial Group, LLC.

Accelerating vaccinations bolster the economic restart More than 18 months after the initial shutdown, Covid remains the most important driver of markets today. Despite the emergence of Delta and other new strains, we believe the big picture macro backdrop remains positive and supportive of risk-taking, particularly in equities. As we first discussed over a year [...] The post Buttonwood Investment Policy Committee Update – November 2021 appeared first on Buttonwood Financial Group, LLC.

Economic Strength with Delta Impact Overall the markets continue to trend higher on the back of substantial stimulus and low interest rates. As the summer heat sets in, an anxious tone seems to be in the air as traders look forward to see if they can find the peak for the latest Delta spike. As [...] The post Buttonwood Investment Policy Committee Update – August 2021 appeared first on Buttonwood Financial Group, LLC.

Economic Recovery Continues  As we approach the halfway point of 2021, we continue to see support for the optimistic base case of a strong economy. In mid-May we received impactful guidance from the CDC removing the need for mask mandates for those who had received vaccinations. It’s likely these comments accomplished two things: First, it gave those who had received the vaccine a green light to re-engage, and secondly, for those who hadn’t received a shot, it may have provided a bit [...] The post Buttonwood Investment Policy Committee Update – June 2021 appeared first on Buttonwood Financial Group, LLC.

Economic Recovery Continues As the Spring season advances toward Summer, we continue to see strong stock markets despite the fear of inflation and higher interest rates. The 10-year Treasury yield reached a high of 1.75% at the end of March, up from a low of about 0.50% in July 2020. Some are concerned higher interest [...] The post Buttonwood Investment Policy Committee Update – April 2021 appeared first on Buttonwood Financial Group, LLC.

2020, to say the least, was a tumultuous year on many fronts. With the election cycle behind us, a new administration in place and a light at the end of the Covid tunnel, our base case assumes 2021 will be prone to the fits and starts of the early cycle stages, yet overall be a [...] The post Buttonwood Investment Policy Committee Update – January 2021 appeared first on Buttonwood Financial Group, LLC.