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Kevin Canterbury of Arizona understands that in times of economic uncertainty, investors often face difficult decisions about how to protect their wealth while still seeking opportunities for growth. As a seasoned financial advisor, Kevin Canterbury has developed a comprehensive approach to safeguarding investments during these challenging periods. His strategies focus on diversification, asset allocation, and rigorous risk management techniques, all designed to help clients navigate uncertain economic landscapes while minimizing potential losses.

The Challenge of Investing in Uncertain Economic Environments

Economic uncertainty can arise from various sources, including geopolitical tensions, shifts in monetary policy, global pandemics, and other unforeseen events. These factors can lead to increased market volatility, making it challenging for investors to predict the future performance of their investments. During such times, the risk of loss can be heightened, and traditional investment strategies may not provide the same level of security they once did.

Kevin Canterbury understands that in these environments, a one-size-fits-all approach to investing simply won’t work. Each client’s situation is unique, and Kevin tailors his strategies to meet individual needs, taking into account their financial goals, risk tolerance, and time horizon. His approach is both proactive and adaptive, ensuring that clients are well-positioned to weather the storms of economic uncertainty.

Diversification: Spreading Risk Across Asset Classes

One of the cornerstone strategies Kevin Canterbury uses to safeguard wealth in uncertain times is diversification. Diversification involves spreading investments across a variety of asset classes, industries, and geographic regions to reduce the overall risk of the portfolio. Kevin believes that a well-diversified portfolio can better withstand economic shocks, as it reduces reliance on any single investment or market.

For example, during periods of economic downturns, equities might underperform, but bonds or other fixed-income securities might offer stability. By including a mix of assets such as stocks, bonds, real estate, and alternative investments, Kevin ensures that his clients’ portfolios are not overly exposed to the risks associated with any one asset class. This approach helps to mitigate losses and provides a more balanced investment strategy.

Kevin also emphasizes the importance of international diversification, particularly in times of uncertainty. Global markets often behave differently from domestic markets, and by investing in a variety of regions, Kevin reduces the impact of localized economic troubles on his clients’ portfolios. This global approach to diversification helps to smooth out returns and provides exposure to opportunities in emerging markets that may be less affected by domestic issues.

Strategic Asset Allocation: Adjusting to Market Conditions

Asset allocation is another critical component of Kevin Canterbury’s strategy for safeguarding wealth. Asset allocation involves determining the right mix of asset classes—such as stocks, bonds, and cash—based on a client’s risk tolerance, time horizon, and financial goals. In uncertain times, Kevin often recommends adjusting the asset allocation to reflect the changing market conditions.

For instance, during periods of high market volatility, Kevin may advise increasing the allocation to more conservative investments, such as bonds or cash, to protect the portfolio from significant losses. Conversely, during times of economic recovery, he might recommend gradually increasing exposure to equities to take advantage of potential growth opportunities. This dynamic approach to asset allocation ensures that the portfolio remains aligned with the client’s financial objectives while adapting to the current economic environment.

Kevin Canterbury’s asset allocation strategies are designed to be flexible and responsive to market changes. He regularly reviews and rebalances client portfolios to ensure they remain consistent with the client’s risk profile and financial goals. This proactive management helps to protect against significant losses during downturns while positioning the portfolio to benefit from potential upswings when markets recover.

Risk Management: Protecting Wealth from Unforeseen Events

Risk management is at the heart of Kevin Canterbury’s approach to investing in uncertain times. Kevin believes that managing risk is not about avoiding it altogether but about understanding and mitigating it. He employs a variety of risk management techniques to protect his clients’ wealth, including diversification, asset allocation, and the use of hedging strategies.

One such technique is the use of stop-loss orders, which are designed to limit an investor’s loss on a position by automatically selling an asset when it reaches a certain price. This strategy can be particularly useful in volatile markets, where prices can change rapidly. By setting stop-loss orders, Kevin ensures that his clients’ investments are protected from drastic declines in value.

Another aspect of Kevin’s risk management approach is the use of defensive investments, such as utility stocks or consumer staples, which tend to be more stable during economic downturns. These types of investments provide a steady income stream and are less likely to experience significant declines, making them a valuable addition to a portfolio during uncertain times.

Kevin Canterbury also advises maintaining a cash reserve within the portfolio. This reserve acts as a buffer, providing liquidity during periods of market stress and allowing clients to take advantage of buying opportunities without the need to sell off other investments at a loss. Having access to cash during uncertain times can also provide peace of mind, knowing that there are funds available to cover unexpected expenses or to invest in opportunities that arise.

Communication and Education: Keeping Clients Informed

Kevin Canterbury places a strong emphasis on client communication and education, especially during uncertain times. He believes that keeping clients informed about market conditions, potential risks, and the rationale behind investment decisions is crucial for maintaining their confidence and commitment to their financial plans.

During periods of economic uncertainty, Kevin provides regular updates to his clients, offering insights into the market environment and explaining how their portfolios are being managed to address current challenges. This transparency helps to build trust and ensures that clients feel secure in their investment strategies, even when the markets are unpredictable.

Kevin also takes the time to educate his clients about the importance of sticking to their financial plan and avoiding emotional reactions to market fluctuations. By reinforcing the long-term nature of investing and the benefits of a disciplined approach, Kevin helps his clients stay focused on their financial goals, regardless of short-term market movements.

Protecting Wealth in Uncertain Times

Kevin Canterbury’s approach to safeguarding wealth during uncertain times is built on a foundation of diversification, strategic asset allocation, and rigorous risk management. By tailoring his strategies to each client’s unique needs and maintaining a proactive approach to portfolio management, Kevin helps his clients navigate the challenges of economic uncertainty with confidence. His commitment to communication and education ensures that clients remain informed and reassured, allowing them to stay focused on their long-term financial goals. In a world where uncertainty is inevitable, Kevin Canterbury’s insights and strategies provide a roadmap for protecting and growing wealth, no matter what the future holds.

Kevin Canterbury of Arizona has built a reputation as a financial expert who remains calm and collected, even in the face of market volatility. His ability to guide clients through turbulent times is rooted in a deep understanding of financial markets and a disciplined approach to investment management. In an era where economic instability can cause significant anxiety for investors, Kevin Canterbury’s insights on staying focused and maintaining a long-term perspective are invaluable.

Understanding Market Volatility

Market volatility is a natural part of investing, characterized by rapid and significant price fluctuations in the financial markets. These fluctuations can be triggered by various factors, including economic data releases, geopolitical events, changes in interest rates, and unexpected global occurrences like pandemics or natural disasters. For many investors, the immediate reaction to volatility is to panic and make impulsive decisions, often leading to buying high and selling low. Kevin Canterbury, however, advises against this reactive approach.

The Importance of a Long-Term Perspective

One of the core principles Kevin Canterbury emphasizes to his clients is the importance of maintaining a long-term perspective. He understands that short-term market movements can be unsettling, but he encourages clients to focus on their long-term financial goals. Kevin often reminds his clients that volatility, while uncomfortable, is also a normal part of the investment journey. By keeping the bigger picture in mind, investors can avoid making rash decisions based on short-term fluctuations.

Kevin Canterbury advocates for a strategy that aligns investments with long-term goals, such as retirement, education funding, or wealth preservation. He stresses that staying committed to a well-thought-out financial plan is key to weathering market volatility. History has shown that markets tend to recover over time, and those who stay invested are often rewarded for their patience.

Diversification: A Key Tool for Managing Volatility

Diversification is another critical strategy Kevin Canterbury uses to manage market volatility. By spreading investments across a variety of asset classes, sectors, and geographic regions, diversification helps reduce the impact of any single investment’s poor performance on the overall portfolio. Kevin Canterbury’s approach to diversification is not just about minimizing risk; it’s about creating a balanced portfolio that can thrive in different market conditions.

For example, when equity markets experience significant downturns, bonds or other fixed-income investments may perform better, helping to stabilize the portfolio. Similarly, Kevin often includes international investments to reduce exposure to domestic market risks. This diversified approach allows clients to benefit from the growth potential of various asset classes while mitigating the risks associated with any one of them.

Staying Disciplined During Market Swings

Kevin Canterbury is a strong advocate for discipline in investment management. He advises clients to avoid making emotional decisions based on market swings, as these can often lead to costly mistakes. Instead, he encourages a disciplined approach to investing, which includes regular portfolio reviews, adherence to asset allocation strategies, and sticking to the investment plan.

During periods of high volatility, Kevin Canterbury often reminds his clients of the importance of rebalancing their portfolios. Rebalancing involves adjusting the portfolio back to its original asset allocation, which may have shifted due to market movements. This process ensures that the portfolio remains aligned with the client’s risk tolerance and financial goals, providing a structured way to navigate through volatile markets.

Communication: Keeping Clients Informed and Reassured

Effective communication is a cornerstone of Kevin Canterbury’s approach to managing market volatility. He believes that informed clients are more likely to stay calm and committed to their investment strategies. During periods of market turbulence, Kevin ensures that his clients receive timely updates and clear explanations of what is happening in the markets and how it may affect their portfolios.

Kevin Canterbury’s approach includes regular check-ins with clients to discuss their concerns, answer questions, and provide reassurance. This open line of communication helps build trust and ensures that clients feel supported, even when markets are volatile. By keeping clients informed and engaged, Kevin reduces the likelihood of panic-driven decisions that could derail their financial plans.

The Role of Cash and Liquidity in Volatile Markets

Kevin Canterbury also emphasizes the importance of maintaining liquidity in investment portfolios during volatile times. Having access to cash or liquid assets allows investors to meet short-term needs without having to sell investments at a loss. This liquidity provides a financial cushion that can be crucial during periods of market instability.

Kevin often advises clients to keep a portion of their portfolio in liquid assets, such as money market funds or short-term bonds, which can be easily accessed if needed. This strategy not only provides peace of mind but also allows clients to take advantage of buying opportunities that may arise during market downturns.

Kevin Canterbury’s approach to navigating market volatility is rooted in discipline, diversification, and a long-term perspective. By staying focused on the bigger picture, maintaining a well-diversified portfolio, and communicating effectively with clients, Kevin helps investors stay calm and confident during turbulent times. His strategies are designed not only to protect wealth but also to position clients for long-term success, regardless of short-term market fluctuations. Kevin Canterbury’s insights are a valuable resource for anyone looking to navigate the ups and downs of the financial markets with confidence and resilience.

Kevin Canterbury of Arizona is a name synonymous with strategic financial management, particularly when it comes to balancing risk and reward. In the volatile world of capital management, where market fluctuations and economic downturns can create uncertainty, Kevin Canterbury has consistently demonstrated an ability to navigate these challenges with precision. His approach, rooted in a deep understanding of financial markets and a commitment to his clients, serves as a blueprint for success in the industry. Understanding that capital management is as much about preserving wealth as it is about growing it, Kevin Canterbury has cultivated a comprehensive strategy that prioritizes both safety and opportunity.

The Power of Diversification in Managing Risk

One of the core strategies that Kevin Canterbury employs in balancing risk and reward is diversification. Diversification is not just a buzzword in finance; it is a fundamental principle that Kevin Canterbury applies meticulously. By spreading investments across various asset classes, industries, and geographic regions, Kevin reduces the impact of any single investment’s poor performance on the overall portfolio. This strategy helps mitigate risk while providing opportunities for growth in different market conditions.

Diversification works by ensuring that no single asset or asset class dominates the portfolio, which can be critical in volatile markets. For example, during economic downturns, while stocks may decline, bonds or other fixed-income assets may perform better, balancing the portfolio’s overall performance. Kevin Canterbury’s clients benefit from a well-balanced portfolio that is designed to weather economic storms while still achieving long-term growth. His approach often includes a mix of equities, bonds, real estate, and alternative investments, each chosen based on the client’s risk tolerance and financial goals.

Thorough Research and Analysis: The Backbone of Success

Another critical aspect of Kevin Canterbury’s risk management strategy is his focus on thorough research and analysis. Kevin believes that informed decisions are the backbone of successful capital management. He and his team at Redstone Capital Management spend countless hours analyzing market trends, economic indicators, and the financial health of potential investments. This rigorous approach ensures that every investment decision is backed by data and a clear understanding of potential risks and rewards.

Maintaining a Long-Term Perspective in Capital Management

Kevin Canterbury also emphasizes the importance of maintaining a long-term perspective in capital management. While short-term market fluctuations can be nerve-wracking, Kevin encourages his clients to focus on their long-term financial goals. This approach helps clients avoid making impulsive decisions based on short-term market movements that could jeopardize their long-term financial health.

For example, during times of market volatility, it’s common for investors to panic and sell off assets at a loss, only to miss the eventual recovery. Kevin’s approach is to remind clients of their original investment goals and time horizons, which often extend beyond the current market cycle. By aligning investment strategies with clients’ long-term objectives, Kevin Canterbury ensures that their portfolios are positioned for sustained growth over time, regardless of market volatility. This long-term perspective also allows for strategic asset allocation that is more likely to yield favorable outcomes over time.

Personalized Risk Assessments for Client Satisfaction

A unique aspect of Kevin Canterbury’s strategy is his incorporation of risk tolerance assessments for each client. Kevin understands that every client has a different level of comfort with risk, and he tailors his strategies accordingly. By conducting comprehensive assessments, Kevin Canterbury identifies each client’s risk tolerance and designs investment strategies that align with their comfort level. This personalized approach not only enhances client satisfaction but also builds trust, as clients feel confident that their investments are managed in a way that suits their individual needs.

The risk tolerance assessment process involves understanding the client’s financial situation, investment experience, time horizon, and emotional response to market fluctuations. For instance, a younger client with a longer time horizon might be comfortable with a more aggressive growth strategy, while a retiree might prioritize income and capital preservation. By aligning the investment strategy with these factors, Kevin Canterbury can ensure that his clients remain comfortable and committed to their financial plans, even during periods of market stress.

The Importance of Liquidity in Risk Management

Kevin Canterbury is also a strong advocate for maintaining liquidity in investment portfolios. In times of economic uncertainty, liquidity becomes a crucial factor in risk management. Kevin ensures that a portion of his clients’ portfolios remains in liquid assets, such as cash or easily tradable securities. This strategy allows clients to have access to funds when needed and provides flexibility to take advantage of new investment opportunities that may arise during market downturns.

Liquidity is not just about having cash on hand; it’s about being prepared for the unexpected. Whether it’s a market correction, a change in personal circumstances, or a new investment opportunity, liquidity provides the flexibility to respond without needing to sell off long-term investments at an inopportune time. Maintaining liquidity also acts as a buffer against unforeseen expenses or financial emergencies, further reducing risk. This aspect of Kevin’s strategy is particularly valuable for clients who may need quick access to funds without disrupting their broader investment strategy.

Regular Portfolio Reviews and Rebalancing for Optimal Performance

Furthermore, Kevin Canterbury places a significant emphasis on regular portfolio reviews and rebalancing. Markets are dynamic, and what may be a sound investment today could become a risk tomorrow. Kevin’s approach involves regularly reviewing his clients’ portfolios to assess their performance and making necessary adjustments to keep them aligned with the clients’ goals and risk tolerance. Rebalancing the portfolio ensures that it remains diversified and that no single asset class becomes disproportionately large, thereby maintaining the balance between risk and reward.

Portfolio rebalancing is not just about maintaining the original asset allocation; it’s also about adapting to changes in the market and in the client’s personal circumstances. For example, if a particular asset class outperforms, it may become a larger percentage of the portfolio than initially intended, increasing risk. Rebalancing involves selling some of these assets and buying more of others to bring the portfolio back in line with the desired risk level. This disciplined approach helps to lock in gains and manage risk effectively.

Transparent Communication as a Key to Success

In addition to these strategies, Kevin Canterbury is known for his transparent communication with clients. He believes that an informed client is a confident client, and he takes the time to explain his strategies, the reasoning behind investment decisions, and the potential risks involved. This open communication fosters a strong relationship between Kevin Canterbury and his clients, built on trust and mutual understanding. Clients are more likely to stay committed to their investment strategies when they fully understand the process and the rationale behind it.

Regular updates, performance reviews, and personalized consultations are all part of Kevin’s commitment to transparency. He ensures that his clients are never in the dark about their investments, which not only builds trust but also helps clients feel more secure in their financial decisions. This level of communication is a cornerstone of Kevin’s client-centric approach, which prioritizes the long-term success and satisfaction of those he serves.

Kevin Canterbury’s approach to balancing risk and reward in capital management is a comprehensive and disciplined one. His strategies are not only designed to protect his clients’ wealth but also to grow it in a sustainable and responsible manner. By combining diversification, thorough research, long-term perspective, personalized risk assessment, liquidity management, and regular portfolio reviews, Kevin Canterbury provides his clients with a robust framework for financial success. It is this dedication to excellence that has made Kevin Canterbury a respected name in the world of capital management.

Kevin Canterbury of Arizona is a shining example of how military service can profoundly shape a career in financial leadership. His journey from serving in the U.S. Army to becoming a managing director and founder of Redstone Capital Management, LLC, is a testament to the discipline, resilience, and leadership skills honed during his military years. Kevin Canterbury’s military background has not only influenced his leadership style but also played a pivotal role in his approach to capital management. The transition from military service to the financial sector may seem like a leap, but for Kevin, it was a natural progression that utilized the skills and values he developed during his time in the Army.

The Early Military Days: Building a Foundation for Success

Kevin Canterbury’s military career began right after high school graduation when he joined the Army and attended Military Police School at Fort McClellan, Alabama. This early decision set the stage for the development of key traits that would later define his success in the financial world. Military training instilled in Kevin a sense of discipline and attention to detail that would become invaluable in his future career. The rigorous environment of Military Police School demanded precision, quick thinking, and an unwavering commitment to duty—qualities that Kevin would carry with him throughout his life.

The discipline required to succeed in military police training is comparable to the precision needed in financial management. Attention to detail, adherence to protocols, and the ability to perform under pressure are all attributes that Kevin cultivated during this time. These traits later translated into his meticulous approach to managing clients’ investments, where every decision is carefully considered and executed with precision.

Global Military Service: Gaining a Broader Perspective

During his time in the Army, Kevin Canterbury was stationed in various locations, including Japan, Alaska, and several countries in Central America. These experiences exposed him to diverse cultures and environments, broadening his worldview and teaching him the importance of adaptability. In the world of capital management, the ability to adapt to changing market conditions and navigate complex global financial landscapes is crucial. Kevin Canterbury’s time in the military equipped him with the flexibility and problem-solving skills needed to thrive in such a dynamic field.

Being stationed in different parts of the world also taught Kevin the value of understanding different perspectives and approaches—an important aspect of managing a diverse investment portfolio. The ability to view challenges from multiple angles and develop solutions that are culturally and contextually appropriate is a skill that has served him well in the financial sector. Kevin’s global experience has given him a unique advantage in understanding the nuances of international markets, enabling him to guide his clients with a broader, more informed perspective.

Leadership Lessons from the Military: Shaping Financial Strategies

One of the most significant aspects of Kevin Canterbury’s military service was his exposure to leadership roles. Serving in the Army requires not only following orders but also leading others, often in high-pressure situations. Kevin’s experience in leading teams and managing resources in challenging environments provided him with a strong foundation in leadership. This experience has directly translated into his role at Redstone Capital Management, where he leads a team of financial professionals and manages substantial investment portfolios. Kevin’s ability to remain calm under pressure, make decisive decisions, and inspire confidence in his team are all attributes developed during his military service.

Leadership in the military is about more than just giving orders; it’s about earning the trust and respect of those you lead. Kevin’s leadership style is collaborative and inclusive, a direct reflection of his military experience. He understands that the best leaders are those who empower their teams, listen to their input, and make decisions that are in the best interest of the collective goal. This approach has been key to building a strong, cohesive team at Redstone Capital Management, where every member feels valued and motivated to contribute to the firm’s success.

Discipline and Resilience: Core Principles of Financial Management

Kevin Canterbury of Arizona credits much of his success in the financial sector to the discipline and resilience he gained in the Army. The military teaches individuals to stay focused on their objectives, regardless of the obstacles in their path. This mindset has been crucial in Kevin’s approach to capital management. The financial markets are often unpredictable, with periods of volatility that can test even the most seasoned professionals. Kevin’s military background has given him the mental fortitude to navigate these challenges, maintaining a steady course and ensuring that his clients’ financial goals are met.

In the financial industry, resilience is key. Markets fluctuate, and unexpected challenges can arise at any moment. Kevin’s ability to stay calm and focused during turbulent times has been a significant asset in managing his clients’ investments. His military training taught him to view challenges not as setbacks, but as opportunities to test and prove his strategies. This resilient mindset allows Kevin to approach each challenge with confidence, ensuring that his clients’ portfolios are not only protected but positioned for long-term success.

Teamwork and Collaboration: Essential Skills for Leadership

Another important lesson Kevin Canterbury learned from his military service is the value of teamwork. In the Army, success often depends on the ability to work cohesively with others towards a common goal. This principle has been a cornerstone of Kevin’s leadership style at Redstone Capital Management. He fosters a collaborative environment where every team member’s input is valued, and collective decision-making is encouraged. This approach not only enhances the quality of service provided to clients but also strengthens the overall effectiveness of the team.

Teamwork in the military is about more than just working together; it’s about trust, communication, and mutual support. These are values that Kevin has carried into his financial career. At Redstone Capital Management, he has built a culture where every team member feels empowered to share ideas, challenge assumptions, and contribute to the firm’s success. This collaborative approach not only improves decision-making but also fosters a sense of ownership and commitment among team members, which ultimately benefits the clients.

Education and Continuous Learning: The Bridge to Financial Success

Kevin Canterbury’s transition from military service to financial leadership was also marked by a strong commitment to education. After completing his military service, Kevin pursued higher education at Minnesota State University in Mankato, where he earned a bachelor’s degree in business. This academic achievement provided him with the theoretical knowledge and analytical skills necessary to succeed in the financial industry. Kevin’s dedication to continuous learning is evident in his pursuit of various professional licenses, including the Series 7 securities license and Life and Health Insurance licenses. These credentials have allowed him to offer a comprehensive range of services to his clients, further solidifying his reputation as a trusted financial advisor.

Kevin’s commitment to education didn’t stop at earning his degree. He understands that the financial industry is constantly evolving, and staying informed is crucial to providing the best possible service to his clients. This dedication to continuous learning is a hallmark of Kevin’s approach to capital management. Whether it’s attending industry conferences, participating in professional development courses, or staying up-to-date with the latest market research, Kevin is always looking for ways to expand his knowledge and improve his skills.

The Lasting Impact of Military Service on Financial Leadership

In conclusion, Kevin Canterbury of Arizona is a prime example of how military service can lay the groundwork for a successful career in financial leadership. The discipline, resilience, leadership, and teamwork skills he developed in the Army have been key factors in his success as a managing director and founder of Redstone Capital Management. Kevin Canterbury’s journey from military service to financial leadership is not only inspiring but also a testament to the enduring value of the skills and experiences gained through military service. His story serves as a powerful reminder that the principles learned in the military can be effectively applied to achieve success in the civilian world, particularly in the complex and demanding field of capital management.

From the leading economic indicators keeping the long list of declines going to the ever-rising risks of recession to the slowed retail sales, July wasn’t a wholly positive month for the US economy. However, it wasn’t all doom and gloom — stocks and energy saw gains, somewhat battling the weaker industrial metal prices. 

According to Kevin Canterbury, founder of Redstone Capital Management, a decline of 0.7% occurred this month, following the 0.6% decline the previous month. As such, it continues the stretch of 15 consecutive negative reports, a feat that hasn’t happened since the 2007/08 crisis. 

Retail Sales Failed to Meet Expectations

While economists predicted retail sales to rise by 0.5%, the sector only managed 0.2% overall. However, subtracting the volatile elements from the equation (e.g., building materials, autos, and gas) flips that percentage on its head; the core measure gained 0.6%.

The most positive influences here came from online retail, electronics, furnishings, and miscellaneous stores, whereas food and beverage sales fell, hurting the overall gain. Experts attribute this decline to the expiration of pandemic food stamp benefits. 

Despite the unfortunate state of the sector, core sales remain up almost 5% year-over-year when negating the downward commodity pressures.

The Empire State Manufacturing Index Fell

July saw the Empire State Manufacturing Index fall by 5.5 points, retaining a positive level of 1.1. Unlike retail sales, this exceeds expectations of declining to -3.5.

While employment transferred to expansion and new orders moved slightly further into expansion, shipments fell. Although, it did keep its solid expansion status, giving experts a dim light at the end of a relatively long tunnel. 

Prices paid reduced by more than five points, but it wasn’t enough to knock the category from expansion — albeit an incredibly slow expansion (the slowest in three years). 

Home Sales Declined Below Forecasted Percentages

Existing home sales dropped by 3.3% to an adjusted annualized rate of 4.16 million units. On the surface, this may not seem diabolical, but experts forecasted a 2.3% decline, so both the single- and multi-family categories failed to meet predictions. 

They’re down by 18% over the past 12 months. However, the median sales prices rose slightly to $410,200, exhibiting a decrease of 1% on a year-over-year basis but remaining one of the highest prices since 1999, according to the NAR.

As for the supply inventory, it measured in at 3.1 months, roughly half the long-term average. And even though July is prime summer selling time, only two months over the last 22 years have shown fewer new listing.

A Mixed Bag for US Stocks

There’s optimism in the stocks world as investors’ positive sentiments continue following better inflation and potential recession avoidance. Disappointingly, such results are stock-specific. 

Growth sectors finished the month in the negative, contrasting recent strength, while value names showed a 2% gain. Small cap stocks performed better than large caps, making up some of their lost ground early in the year. However, communications and consumer discretionary fell by 2% and 3%, respectively.

The Federal Reserve Open Market Committee has decided to increase the “Fed funds rate” for the 11th time since March 2022. With an additional 0.25%, the new rate now falls within 5.25% to 5.50% as a means to address a looming recession. 

Economic Growth and Recession

Fortunately, Kevin Canterbury of Redstone Capital Management reports that the economy is doing well, with a 2% growth in Gross Domestic Product in the first quarter of 2023. However, for the second quarter, predictions say it will end up a tad lower, hovering between 1.5% and 2%. 

According to the International Monetary Fund, 2022’s economic growth is projected to be at 2.1%, going down slightly in 2023 to 1.8%, and dropping further to a projected 1% in 2024. 

Inflation and its Effects

As expected with the rapid rate hikes, inflation has been slowing down. Consumer prices used to go up at a rate of 3% for headline and 4.8% for core. However, the prices of homes and related expenses are decreasing slower than desired. 

Overall, while inflation is still in progress, it’s not as extreme as experts have projected. 

Although the experts over at the Federal Reserve are still unsure of what the optimal inflation level is, it’s clear that they’re shooting for a number lower than 3%. If true, and if things don’t get derailed, the 3% target might come to fruition by 2024.

Jobs and Employment

The job market has gone through the proverbial wringer since the pandemic. 

Businesses shut down, then reopened in the midst of a labor shortage. Things have mostly normalized since then, but some industries are still struggling to get enough manpower.

Despite the current situation, the unemployment rate is still low at 3.6%. It seems businesses are chugging along, holding on to the skilled workers that they have, which is a good sign that the economy is weathering the storm.

The Fed’s Decisions and Their Impact

In June, the Federal Reserve decided to take a break and let conditions ‘catch up.’ The Fed elaborates on their conservative approach by reminding dissidents that rate hikes have only been at 4% since December, and it takes time (about 1 to 2 years) for the economy to start showing cracks.

Allowing these conditions to ‘catch up’ reduces the risk of overcorrection. The Fed acknowledges that rate hikes are a hammer, not a scalpel, and that their current situation calls for a little more finesse.

Financial Markets and Interest Rates

As for financial markets, they’re celebrating that interest rates are unlikely to get higher. Businesses and real estate companies took advantage of the low interest rates, so now they’re in a good spot until loans/bonds come due and interest rates are still high. Though that isn’t really a big concern since maturities are spread over time rather than being lump sums that need refinancing.

Concurrently, bond defaults and bankruptcies are on the rise, putting pressure on the financial system. This is accompanied by people with low-interest mortgages refusing to move, bottlenecking the market for potential buyers. 

Economic Cycles and Outcomes

When needing to choose between inflation or recession, the right choice is a balancing act of staying in the middle–that is the Fed’s goal. 

So far, so good.

The economic outlook at the end of June provided some conflicting signals. While there’s good news, it’s clear that, now more than ever, every strategic investing approach requires careful attention to the details.

The Conference Board Index of Leading Economic Indicators reported a drop of 0.7% in May – the 14th consecutive monthly decline. This, along with stock market turbulence, suggests an economic slowdown is upon us. Despite this, resilience in the housing market and stability in the labor market are painting a more optimistic picture.

Kevin Canterbury of Redstone Capital Management in Arizona takes a closer look at the details most salient to those looking for balanced investment approaches.

An Unanticipated Upturn in the Housing Market

The best news in the recent reports was in housing and employment. Not only did existing home sales see an uptick of 0.2% in May, but housing starts, which signal the commencement of new residential construction projects, jumped a substantial 21.7%. This paints an optimistic picture for the current state of related sectors like construction, retail, and financial services.

Job Market Consistency

At the end of Q2, news from the labor market showed a reassuring steadiness. For starters, initial jobless claims – a kind of early-warning system for economic distress – were unchanged. In other words, the same number of people filed for unemployment benefits as in the previous period, indicating no increase in layoffs or job losses.

At the same time, the ongoing jobless claims, representing those who’ve been receiving unemployment benefits for a while, dropped slightly. This decrease suggests that some people have returned to work.

A Global Market Stirred by Interest Rates

The stock markets saw the most turbulence, with major U.S. indexes like the Dow Jones, S&P 500, and NASDAQ registering their first negative week in nearly two months. This downward movement was in part triggered by Fed Chair Jerome Powell hinting at an impending rise in interest rates.

Internationally, the strengthening U.S. dollar posed challenges for global markets. The decision by UK, Norway, and Switzerland’s central banks to raise interest rates also exacerbated fears of a possible worldwide recession.

Bonds, Commodities, and the Balance of Markets

The bond market showed resilience, however, as yields remained steady for the most part. However, the yield inversion between 3-month and 10-year Treasury notes signaled a shift that investors will certainly want to keep their eyes on, since this often precedes an economic downturn and an uptick in short-term interest rates. 

The commodities market further complicated the picture as oil prices fell, driven by fears of such a recession. A reduction in energy costs for consumers and businesses could stimulate spending in other areas.

That’s not the whole picture, though. Natural gas prices climbed due to the heightened demand caused by a heatwave. Higher utility bills for households and businesses could dampen consumer spending.

Summary

Economic indicators give us reason to exercise caution and encourage proactive strategies to mitigate potential risks. A strong housing market and steady jobs report show us that there’s plenty of opportunity for growth, even if the prospect of rising interest rates may influence investment decisions.