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Linnard Financial Management & Planning, Inc.

Fee-Only Financial Planning and Investment Advisor


Outlook & Trends

LFM&P publishes Outlook & Trends, a quarterly newsletter. Outlook & Trends provides a commentary on current economic and market conditions as well as a financial planning topic of interest. These past issues provide an interesting view of the progression of economic and market conditions since 2002

Legal and Regulatory News to Know January 2020

Lawmakers and regulators have been busy proposing and enacting several changes that could be important for your retirement and your understanding of what you can expect from financial advisors.

Secure Act
Regulation Best Interest
Form CRS
Stand Alone Fee Table
CFP® Standards

Which Investment Style Do You (or your Advisor) Follow? October 2019

There are probably as many different investing styles as there are investors. All of them work well sometimes, but none of them work well all the time. Since the bottom of the last recession, passive investing in index funds has yielded very good results. This is not unlike the so-called "one-decision growth stock" strategy of the late 1960s. The one decision then was to buy, and theoretically hold forever. This newest incarnation is the passive index strategy, which has been aided for years by supportive central bank policy and automatic 401(k) investing.

All things come to an end at some point. The one-decision approach ended poorly in the early 1970s. There are now people suggesting that the popularity and growth of indexing will be an accelerant in the next bear market, when many of the passive investors want to cash out of their large-cap S&P 500 index and target-date funds....

The Bigger Picture July 2019

When economic cycles are strong and have lasted a long time, there is a tendency, called “recency bias”, to think that these conditions will remain in place well into the future. Over the last 30 to 40 years, extended expansion periods have persisted due to either government deficit spending or Federal Reserve support or both.

Keynesian economics suggests that governments should be savers during the good times and provide extra money to the economy in poor times. Unfortunately, politicians have not maintained the fiscal discipline to limit spending during the expansion phase. The result has been artificially long expansions, which are good for votes, but allow
large economic imbalances to build, particularly in the financial markets...

The Debt Cycle and Yield Curve Inversion April 2019

Our current situation can be seen within the context of an economic cycle top. Ray Dalio, founder of the world’s largest hedge fund, has published a treatise entitled "A Template for Understanding Big Debt Crises" that discusses the existence of short and long debt (and economic) cycles. The former last 7-10 years. The latter are 75-100 years. The short cycle causes typical economic recessions. The long cycle causes economic depressions when debt gets too far out of hand.

Dalio also produced a short, animated version, which explains how the economy works. You can see it at While Dalio does not specifically mention it, since short cycles are superimposed on top of the long cycle, it is understandable that there could be multiple bubble tops formed by the peaks of the short cycles near a long cycle top. We may be witnessing this as the long cycle rolls over, evidenced by the sequence of dot-coms, the housing bubble, and now the current central bank QE bubble...

Teddy and Grizzly Bears January 2019

A flattening trend is always present during a period of horizontal consolidation and typically can be seen before the onset of an extended decline in prices. Years ago, when we first started studying the stock market, different periods were dubbed corrections, consolidations and bear markets. Corrections occurred when rising prices got ahead of themselves and were brought back to a more reasonable level within an ongoing upward trend. Consolidations happened when an intermediate term (i.e. about 9 months or shorter) cyclical counter-trend slowed a rising trend down, causing the overall direction to become horizontal. A bear market signified a long-term down trend, which was as much a state of mind as it was a market phenomenon. Sellers created falling prices which reduced the collateral value for margin loans. Less collateral forced more selling. Selling created more selling. Eventually the entire over-leveraged financial structure washed out, until there was no one left who wanted or had to sell...

Outlook & Trends Archive 2002 - 2018

The contents of Outlook & Trends reflects the general opinions of LFM&P and is not intended to provide investment or planning advice. Such advice is only provided by means of individual agreement with LFM&P.