June 13, 2022
Welcome Alex!
Please welcome Alex Avestini to our LifeStage Wealth Management team! Alex is a Certified Financial Planner and joins us after working for another local financial planning firm for eight years. Alex will be focusing on preparing client financial plans, serving on our investment committee and working with clients too!
  • Lived in Plymouth all of my life (Wayzata grad).
  • Finance degree from North Dakota State University (NDSU – go Bison!)
  •  Been with my wife (Billie) for almost 9 years (just celebrated our 4 year wedding anniversary in May).
  • Billie is an Interior Designer.
  • We co-parent Billie’s son from a previous relationship (Brantley – 10).
  • We are very active and love the outdoors (especially being on the water). Love to slalom ski and wake surf or rip Brantley around on the inner tube behind the boat.
  • Our favorite activities include: hiking AZ mountains, biking, working out, traveling across the US and abroad (I love driving and taking long road-trips), playing scrabble, cooking, spending time with family & friends (especially my sister Gabby who’s 18 months younger) & her husband.
  • We often travel to Scottsdale/Sedona (our 2nd home) as we love the mountains & red rock.
  • We have two dogs: Eros – Australian Shepherd (8) and Nyx: Australian Cattle Dog mix (5).
  • Spent last 8 years as a wealth advisor working with another local financial planning firm and am very excited to be joining the LSW team.

-         More Fun Facts:
  • Favorite food: Vietnamese Pho & Sushi/Poke
  • Favorite drink: Tequila on the rocks
  • Favorite TV Show: The Office
  • Favorite City: Sedona, AZ
  • Competed in 2 bodybuilding shows
  • Car enthusiast
Market Update
Inflation is proving to be far more tenacious than markets had hoped. With a 3.9% drop in the S&P 500 today, it is now down 21% year-to-date.
 
The idea that inflation peaked in March was put to rest last week when the Consumer Price Index (CPI) showed that inflation accelerated in May. Overall, prices were up 8.6 percent last month, an increase from April’s 8.3 percent. It was the highest inflation reading we’ve seen since December 1981.
 
The most significant price increases were in energy (+34.6%) and food (+10.1%). That’s unfortunate because the War in Ukraine has a significant influence on food and energy prices right now, and no one knows how long it will last. In April, the World Bank’s Commodity Markets Outlook reported:
 
“The war in Ukraine has been a major shock to global commodity markets. The supply of several commodities has been disrupted, leading to sharply higher prices, particularly for energy [natural gas, coal, crude oil], fertilizers, and some grains [wheat, barley, and corn].”
 
With inflation rising, the Federal Reserve will continue to aggressively raise the federal funds rate. There is a 50-50 chance the Fed will raise rates by 0.75 percent in July (rather than 0.50 percent), and some economists say there could be a 0.75% hike this week when the Fed meets, reported Scott Lanman and Kristin Aquino of Bloomberg.
 
The inflation news unsettled already volatile stock and bond markets. Major U.S. stock indices declined last week as investors reassessed the potential impact of higher interest rates and inflation on company earnings and share prices, reported Randall W. Forsyth of Barron’s. The Treasury yield curve flattened a bit as the yield on two-year Treasuries rose to a multi-year high, reported Jacob Sonenshine and Jack Denton of Barron’s. The benchmark 10-year Treasury Note finished the week yielding more than 3 percent.
 
There was a hint of good news in the report. The core CPI, which excludes food and energy prices because they are volatile and can distort pricing trends, is trending lower. It dropped from 6.5 percent in March to 6.2 percent in April and 6.0 percent in May.
 
The Federal Reserve’s favored inflation gauge is the Personal Consumption Price (PCE) Index, which will be released on June 30.
Coping With a Bear Market is Not Easy

A bear market occurs when stocks have declined in value by about 20 percent or more. Investing during a bear market can be a lot like playing baseball for a team that’s in a slump. Your teammates are worried, hecklers distract the players’ attention, and the team’s record of wins and losses moves in the wrong direction. You might find yourself beginning to question whether playing baseball is right for you.
 
Before you decide to exit the game, here are some tips for coping with bear markets:
 
1.   Remember, downturns don’t last forever. The Standard & poor’s 500 Index has experienced 7 bear markets over the last 50 years and recovered from all of them, reported Thomas Franck of CNBC. Here’s a rundown of the duration and returns of bear and bull markets since 1973.
 
Year         Bear market       Total return               Bull market        Total return   
1973         21 months            -48 percent                 74  months          +126 percent
1980         20 months            -27 percent                 60  months          +229 percent
1987         3  months            -34 percent                 31  months          + 65 percent
1990         3  months            -20 percent                 113 months          +417 percent
2000         31 months            -49 percent                 60  months          +102 percent
2007         7  months            -57 percent                 131 months          +401 percent
2020         1  month              -27 percent                 TBD                      TBD
 
“Bull markets tend to last far longer and generate moves of far greater magnitude than bear markets. Time after time, bear markets have proven to be good buying opportunities for long-term investors,” explained Franck. Remember, past performance does not guarantee future results.
 
2.   Stay diversified. Make sure your portfolio remains well diversified. During bear markets, some segments of the market will outperform while others underperform. A diversified portfolio can provide a cushion. Diversification won’t help you avoid a loss, but it can help minimize it.
 
3.   Talk with us. During market downturns, investors often panic. That causes some to sell investments and incur losses that may be difficult to recover. If you’re tempted to sell, give us a call first. We’ll discuss your concerns, review your portfolio and help you decide on a course of action.
 
Possibly the most important things you can do during a bear market are to stay calm and resist making any sudden moves.
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Weekly Focus - Think About It
“You get recessions, you have stock market declines. If you don't understand that's going to happen, then you're not ready, you won't do well in the markets."
—Peter Lynch, former portfolio manage
Bruce Kuehl | 763.542.8884 | bkuehl@lifestagewealth.com