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12:00 TUESDAY – Investing Insights #260 – 06/24/25

The Defensive Advisor
The Defensive Advisor

by Robert Holman, CFA CFP© | www.DefensiveAdvisor.com


STOCK MARKET RATING (THE BIG PICTURE) … 7.0 (1 - 4 is bearish, 5 is neutral, 6 - 9 is bullish).  

 

Market action has not produced much in the way of a discernible trend, and market action can be best described as predominantly sideways. I've raised my market rating to a bullish 7.0. Certain uncertainties still exist, as described below.

 

I am pleased with the temporary cease-fire agreement between Israel and Iran.  However, I remain skeptical that Iran will keep the agreement.  My thought is “Frequently a liar, always a liar.”  I fully expect the market to respond favorably to this news until the agreement is factually disproven.

 

The remaining market overhangs are obvious and well-known: tariffs, weakening economic data, lack of a new tax package from the Senate, and a steepening yield curve. 

 

Many participants are looking for a tariff-related growth slowdown, although most are not looking for a recession. Some believe tariffs are not inflationary.  I know from personal experience that not all academic tenets are correct, so for now, I’m with the view that tariffs may not be as inflationary as thought.

 

The initial estimate for First Quarter real GDP revealed a downshift in economic activity with a slight decline in growth, down -0.2%.  There is increasing concern that the economy has slipped into a mild no-growth period that started before the announcement of trade tariffs. My best guess is that we may have two quarters of similar decline, followed by a resumption of an uptrend.

 

One of the governors of the Federal Reserve System stated that rates may come down as early as the next Fed meeting, five weeks from now.  However, that was followed by a statement from another governor that it is too soon for rates to come down.  I believe that there is a good chance rates will be lowered by 25 bps (1/4 of 1 percent) in late July.

 

According to analyst Seth Golden at Finom Group, the S&P 500 retraced 50% of its bear market decline.  Since 1956, whenever this retracement has occurred, the S&P 500 index has risen to all-time highs over the next 12 months, 100% of the time.  This bodes well for sticking with our portfolios and reaping the rewards. 

 

Under these circumstances, investors are better off deploying any remaining cash reserves, waiting to make existing portfolio position adjustments until hard data is available to indicate a sustainable trend in specific economic activity.

 

 

 

Under these circumstances, investors are better off to wait to make portfolio adjustments until hard data is available to indicate a sustainable trend in economic activity.

 

PORTFOLIOS … After reading this report, if you are unsure how to respond to these conditions, you may send a message to my Secure Email and I’ll reply with the information you need.  I’ll also give you a free portfolio assessment, see the link below.

 

TO MY CLIENTS … THANK YOU FOR YOUR TRUST.

 

 

LEARN FROM THE BIBLE … Proverbs 15:22 MSG - Refuse good advice and watch your plans fail; take good counsel and watch them succeed.

 

This report is a 3-minute read, published every other Tuesday afternoon. To sign up for this bi-weekly e-Newsletter, go to: http://www.defensiveadvisor.com/blog.

 

Opinions in this post are for general information only and are not intended to provide specific advice to, or recommendations for, any individual without our complete knowledge of that individual’s total financial profile. No strategy assures success or protects against loss. Nor does past performance guarantee future results.

 

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Last Edited: July, 2024

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The written content and opinions voiced herein are for general information only and are not intended to provide specific advice or recommendations for any individual without HWM having complete knowledge of that individual’s total financial profile.  Material presented herein is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. 
 
To determine what is appropriate for you, consult HWM or a qualified professional financial advisor.  While we provide general tax and legal information, please consult with a tax professional or attorney on tax and legal issues before proceeding on such information.  No investment strategy guarantees success or assures against occasional losses.

 

CFA - Chartered Financial Analyst (or CFA®): The CFA charter is the gold standard for the investment industry. CFA charterholders enjoy a mark of the highest distinction in the investment management profession, a globally respected, graduate-level investment credential established in 1962 and awarded by CFA Institute — the largest global association of investment professionals. Passing the three six-hour cumulative CFA exams (Levels I, II, III) is a difficult feat that requires extensive study (successful CFA candidates report spending an average 3,000 hours of study to become a CFA). Earning the CFA charter demonstrates mastery of many of the advanced skills needed for investment analysis and decision making in today’s quickly evolving global financial industry.  The CFA exam is generally considered more difficult than the CPA exam or the bar exam. There are about 59,000 CFA charterholders.

 

To earn the CFA charter, candidates must master a broad-based curriculum of investment principles, and commit to abide by, and annually reaffirm, their adherence to the CFA Institute Code of Ethics and Standards of Professional Conduct. The CFA Program curriculum provides a comprehensive framework of knowledge for investment decision making and is firmly grounded in the knowledge and skills used every day in the investment profession. The three levels of the CFA Program test a proficiency with a wide range of fundamental and advanced investment topics, including ethical and professional standards, fixed-income and equity analysis, alternative and derivative investments, economics, financial reporting standards, portfolio management, and wealth planning.

 

The CFA Institute Code of Ethics and Standards of Professional Conduct, enforced through an active professional conduct program, require CFA charter holders to:

  • Place their clients’ interests ahead of their own

  • Maintain independence and objectivity

  • Act with integrity

  • Maintain and improve their professional competence

  • Disclose conflicts of interest and legal matters

 

CFA® charterholders who fail to comply with the above ethics, professional standards and other requirements may be subject to the CFA Institute’s enforcement process, which could result in censure or permanent revocation of their CFA® charter.

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CFP® (Certified Financial Planner): The CERTIFIED FINANCIAL PLANNER™: The CFP® certification is a voluntary certification; no federal or state law or regulation requires financial planners to hold CFP® certification. It is recognized in the United States and other countries for its (1) high standard of professional education; (2) stringent code of conduct and standards of practice; and (3) ethical requirements that govern professional engagements with clients. Currently, more than 103,000 individuals have obtained CFP® certification from the CFP Board in the United States. 


To attain the right to use the CFP® marks, an individual must satisfactorily fulfill the following requirements: 
  ●  Education – a) Complete an advanced college-level course of study addressing the financial planning subject areas that CFP Board’s studies have determined as necessary for the competent and professional delivery of financial planning services, and b) attain a bachelor’s degree from a regionally accredited United States college or university (or its equivalent from a foreign university). CFP Board’s financial planning subject areas include insurance planning and risk management, employee benefits planning, investment planning, income tax planning, retirement planning, and estate planning; and
  ●  Examination – Pass the comprehensive CFP® Certification Examination. The examination includes case studies and client scenarios designed to test one’s ability to correctly diagnose financial planning issues and apply one’s knowledge of financial planning to real-world circumstances; and
  ●  Experience – Complete at least three years of full-time financial planning-related experience (or the equivalent, measured as 2,000 hours per year); and  
  ●  Ethics – Agree to be bound by CFP Board’s Standards of Professional Conduct, a set of documents outlining the ethical and practice standards for CFP® professionals. 


Individuals who become certified must complete the following ongoing education and ethics requirements to maintain the right to continue to use the CFP® marks: 
  ●  Continuing Education – Complete 30 hours of continuing education hours every two years, including two hours on the Code of Ethics and other parts of the CFP Standards of Professional Conduct, to maintain competence and keep up with developments in the financial planning field; and  
  ●  Ethics – Renew and agree to be bound by the CFP Standards of Professional Conduct. The Standards prominently require that CFP® professionals provide financial planning services at a fiduciary standard of care. This means CFP® professionals must provide financial planning services in the best interests of their clients. 

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CFP® professionals who fail to comply with the above standards and requirements may be subject to CFP Board’s enforcement process, which could result in suspension or permanent revocation of their CFP® certification. 

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