Quarterly Newsletters

Sterling Financial Report Q2 2024 Newsletter

Sterling Financial Report Q2 2024 Newsletter

Those of us that live here in Southern California can attest to the fact that we’ve had a lot of rain this year, and particularly a lot of rain in short periods of time. Several news outlets reported as of early March, San Diego had already received as much rain in the past 5 months as they typically receive in their normal 12-month reporting period; at one point some stated they received the most rainfall over any two-day period in recorded history.

Sterling Financial Report Q1 2024 Newsletter

Sterling Financial Report Q1 2024 Newsletter

Happy New Year! Our warmest regards to you and your families for a healthy and engaging 2024.  Wow, I cannot believe we are already saying 2024!  The old saying that “the days are long but years are short”, seems to be the biggest understatement I recall in recent memory.  Our family had a very substantive year in that everyone is healthy and employed, we enjoyed a couple of nice family trips, and our oldest son got engaged—truly an exciting year for all of us.

Sterling Financial Report Q4 2023 Newsletter

Sterling Financial Report Q4 2023 Newsletter

Legendary investor, Robert Arnott, defines a stock bubble as a stock that is trading at impossible growth assumptions and the next investor in the stock is unconcerned with the fundamentals of the company. I bring up bubbles because many would say the NASDAQ 100 stock index (heavy in technology stock) is in bubble range as it is up +33% year-to-date, even though it has declined for the last several weeks. For example, the valuation of artificial intelligence darling stock NVIDIA is trading at an implausible 33 times sales. For comparison, other quality companies, such as APPLE, are trading at a mere 7 times sales, while a very large bank, J.P. Morgan, is trading at 3 times sales.

Sterling Financial Report Q3 2023 Newsletter

Sterling Financial Report Q3 2023 Newsletter

Well that went quickly! The first half of 2023 is officially over, and with it, certain concerns seem to have abated, while other topics seem to occupy a great deal of our mind-space. One governmental institution that constantly captures media attention due to its fascinating evolution and present-day significance, is the U.S. Federal Reserve Bank, commonly known as the Fed. In this piece, we aim to provide a concise overview of its evolution, significant milestones, and unwavering commitment to combating inflation. Established over a century ago in 1913, the Fed was created with the objective of establishing a stable monetary framework and safeguarding against financial crises. Throughout its history, the Fed has implemented diverse monetary policies to ensure price stability, eventually adopting a "dual mandate" of maintaining both price stability and full employment. 

Sterling Financial Report Q2 2023 Newsletter

Sterling Financial Report Q2 2023 Newsletter

Major retirement plan changes resulted from the passage of the
SECURE 2.0 Act last year, and starting January 1st of 2023 there
are 92 new provisions that went into effect. We have selected
several of the more significant changes that will shape the savings
and retirement landscape of employers and employees alike. 

Sterling Financial Report Q1 2023 Newsletter

Sterling Financial Report Q1 2023 Newsletter

Good-bye and good riddance to 2022, and welcome to 2023! I say good riddance because both personally and professionally, I am glad to leave the many challenges of 2022 behindand I have heard from many of you who feel the same. While we cannot change what happened, we can learn and grow from it and move forward, exactly what we intend to do here at Sterling Financial Group.

Journalist, historian and author Paul Johnson recently passed away and one of his notable quotes has stuck with me: “There are no inevitabilities in history.”

Sterling Financial Report Fall 2022 Newsletter

Sterling Financial Report Fall 2022 Newsletter

Possible Stagflation: What to Do?

The possibility of stagflation has reappeared in the news, after nearly a forty-year hiatus. Stagflation is an economic cycle characterized by slow growth, a high unemployment rate, and high inflation. Presently, two of the three factors can be seen in the economy with the exception being high unemployment. With this in mind, we’ve begun to see the longer end of the yield curve come down and even invert (the 30Yr, 10Yr, and 5Yr Treasury yields are now below the 2Yr yield). These inversions reflect the fear of a recession and could indicate a peak in longer term interest rates.

We saw this development as a possible buying opportunity for bonds over the summer. Overall, in the recent rebalance of our client portfolios, we increased the overall bond allocation from 24% to 30% in our typical growth and income portfolio (a 25% increase to the bond allocation).

Sterling Financial Report Summer 2022 Newsletter

Sterling Financial Report Summer 2022 Newsletter

Inflation and the CPI

Inflation seems to be in the news daily and on everyone’s mind–I just filled up my completely empty gas tank at a cost of $133.40! – inflation is on my mind as well. Below are some facts as to what goes into Consumer Price Index (CPI), and comments on what such higher levels of inflation could mean for the economy and markets. Warren Buffet famously said that “forecasts may tell you a great deal about forecaster, but they tell you nothing about the future.” While we are not trying to predict the future, below is our best thinking on how rising prices may impact the economy over the coming few years.

Sterling Financial Report Q1 2022 Newsletter

Sterling Financial Report Q1 2022 Newsletter

Dear Clients & Friends,

Our best to you for 2022; we hope the year has started off well for all of you and your families. We are now almost two years into the Covid-19 pandemic, and we know many have been impacted by this latest Omicron variant. Fortunately, 64% of the U.S. population is now fully vaccinated (according to the Mayo Clinic) and over 76% have received at least one dose, and many have also built up a natural resistance from contracting the illness. As a result, we may be reaching the “endemic” stage, and we are hopeful that 2022 will see a return to a more normal level of activity in all facets of our daily lives. The balance of my comments will focus on the financial markets across a few of the major asset classes, to provide our best thinking.

Sterling Financial Report Q4 2021 Newsletter

Sterling Financial Report Q4 2021 Newsletter

Dear Clients & Friends,

Americans are typically an optimistic lot, yet ‘we’ suddenly turned gloomy in August as demonstrated by the University of Michigan Consumer Sentiment Survey, dropping more than 13% in August to the low for this decade. Moreover this is part of a trend, since going back to June the index is off more than 20%. Why so gloomy? The continuing problems related to COVID-19 and the up and down rules seem to play a part, but there has to be more. Our own sense is that it is a combination of rising prices which are frequently seen in big ticket items like cars or homes, as well as the uncertainty over major tax and financial policy changes currently being contemplated, not to mention ongoing tensions with China, Afghanistan and other international cohorts.

Sterling Financial Report Q3 2021 Newsletter

Sterling Financial Report Q3 2021 Newsletter

Dear Clients & Friends,

Many clients over the years have inquired about investment returns and wonder what should a reasonable expectation be for long-term returns? As with many things in finance, the answer isn’t simple or straight forward: it depends. Investment performance has to do first and foremost with the overall allocation of your portfolio, but other key drivers include how long you remain invested and whether or not you are reinvesting your earnings – versus taking income from the portfolio, which in reality is really a withdrawal of earnings (or principal). Obviously there are other factors such as the specific investments chosen, when you invest and a myriad of other variables can impact returns as well.

Sterling Financial Report Q2 2021 Newsletter

Sterling Financial Report Q2 2021 Newsletter

Dear Clients & Friends,

We hope you are well and are starting to make plans to move forward
with your lives in a safe yet productive and enjoyable manner. We have
much to be thankful for, as our office staff and their families here at
Sterling Financial Group have remained healthy and all are looking to
more normal activities.

Speaking of normalcy, the TSA has screened over a million flyers for the
past 18 days which is the first time we’ve reached those levels in over a year.
Rail volumes are also up approximately 12% from a year ago, and car sales
are running close to 16 million annualized units in the United States,
another bullish sign for the economy. Importantly, consensus 2021 GDP
growth estimates are now expecting the US to grow at 5 or 6% this year, as
companies handily beat their earnings forecasts. All this points to a
robust return to economic expansion, and that has led many to fret that
the economy might be on the verge of over-heating and causing inflation.

Sterling Financial Report Q1 2021 Newsletter

Sterling Financial Report Q1 2021 Newsletter

Welcome to 2021, we hope you have a safe and fulfilling new year. Our holidays were spent with close family or a few friends, enjoying our covered patio here in Pasadena.

Many publications make prognostications at this time of year, however you probably know by now we are not in the business of selling airtime on TV (commercials), or generating more newspaper column inches (AKA, old-fashioned ads), nor clicks on a website to generate revenue. What we are in the business to do is provide you with timely and relevant information, professional investment management and customized financial structure and strategies specific to you. We offer procedure over predictions, data over descriptions and unique solutions over universal suggestions. What specifically do we mean by these?
Sterling Financial Report Q4 2020 Newsletter

Sterling Financial Report Q4 2020 Newsletter

In a year when statistics are flying around like an infielder's drill in baseball, we thought it prudent to touch on the confusion often present in common statistics.

While often mistakenly attributed to Mark Twain, one can find the explanation in Wikipedia that ""Lies, damned lies, and statistics" is a phrase describing the persuasive power of numbers, particularly the use of statistics to bolster weak arguments. It is also sometimes colloquially used to doubt statistics used to prove an opponent's point".

Sterling Financial Report Q3 2020 Newsletter

Sterling Financial Report Q3 2020 Newsletter

Summer greetings and our best wishes that you and your family are safe and healthy, and getting outdoors to enjoy the warmer weather. With all of the news and facts reported, we know that at times the information flow is overwhelming. This quarter we return to some basic, fundamental details about our investment process and underlying factors from which we begin our analysis, highlighting two areas: Timing and Demographics.

Sterling Financial Report Q2 2020 Newsletter

Sterling Financial Report Q2 2020 Newsletter

Dear Clients and Friends:

We know that you are dealing with many challenges at this time but please know that we are here to support you in any way that we can. With the recent volatility in the markets, we did hear from several clients who wanted to know “what they should do? ” given the market conditions. With that in mind and our research over the years on behavioral finance we wanted to reiterate our investment approach in the context of some of the more emotional aspects to investing that nearly all of us experience. Above all, take care of your health and be safe!

Sterling Financial Report Q1 2020 Newsletter

Sterling Financial Report Q1 2020 Newsletter

Dear Clients and Friends:

Welcome to the decade 2020! The challenges and opportunities presented have never been greater. Although we are in the "money" business, we believe our duty is to support your financial stability so that you can lead lives of meaning and purpose, not just counting dollars and cents. Despite our differences as a country, I am truly optimistic that we will continue to move ourselves forward, trying to improve the lives of our children and grandchildren, making our community and world a better place, and helping those in need. Along the way we know you want to have some fun-  whether driving your dream car, traveling the world, lending a hand for a down payment on a house, or whatever your passion is. In speaking with our clients last year and doing a little digging, we found that over 50% of our clients were related to at least one other client - thank you for the opportunity to serve your family, as such family bonds are what this firm is all about. 

Sterling Financial Report Q3 2019 Newsletter

Sterling Financial Report Q3 2019 Newsletter

Happy Fall! For those of us that enjoy college football, this is one of our favorite times of the year, while I know others are wanting summer to stick around longer. Now that the third quarter of 2019 is over, I thought I would recap some of the economic information that we have witnessed so far this year.

There is (almost) always a confusing set of economic data coming out, some indicating economic expansion, while others pointing to a contracting economy. When picked up by news or other market commentators such data is often spun into convenient 40 second sound-bites that fit into a narrative or time slot that the media business is looking to fill. I say "media business" intentionally as we do need to remember that whether one consumes news and information from Facebook or social media, or more traditional television or print media, nearly every outlet is a for-profit model looking to grow their audience, place ads and keep their audience tuned-in.

Sterling Financial Report Q2 2019 Newsletter

Sterling Financial Report Q2 2019 Newsletter

Welcome to this first edition of Sterling Financial Report, we hope you find this information useful and that we continue to be a resource for you and your family. With the first half of 2019 complete, financial markets have rebounded significantly from the poor showing in 2018, and the especially difficult 4th quarter. While Sterling Financial Group has focused on long-term results when making asset allocation and investment strategy decisions, and our investment choices reflect that outlook as a priority, we are not immune from the news distraction and market declines that occasionally occur. When experiencing volatility, most investors are very pleased to participate in the upside swings, but at times may be extremely anxious over downside volatility, which in reality is a fairly normal pattern and should not be feared. What volatility should we expect in stocks, and what is normal?