North Fork Financial, LLC

10/10/2022

We believe we have a better way for risk managing investments. Here is our October newsletter (released to clients 10/4) explaining where we see things headed into year end. Would you like a second opinion on your portfolio?

Money Conversations October 2022 Greetings and welcome to the October edition of Money Conversations. Below you will find our thoughts on the current market environment. We are making an effort to exp

09/06/2022

Worldwide economic deterioration continues. The September newsletter explains what we are seeing in the current data.

Money Conversations September 2022 Good morning and welcome to the September edition of Money Conversations. We hope you had a great Labor Day weekend. Below you will find our thoughts on the current

07/12/2022

July newsletter released to clients on 7/7. We believe we have a better way to protect our clients' hard earned capital.

Money Conversations July 2022 Good morning and welcome to the July edition of Money Conversations. We hope this finds you well and cool amidst the summer heat. Below you will find our thoughts on th

06/07/2022

June Newsletter includes current market commentary and a video discussion on our investment process. Please feel free to share!

Money Conversations June 2022 Good morning and welcome to the June edition of Money Conversations. We hope this finds you well. Below you will find our thoughts on the current market environment and

05/18/2022

Concerned about how the markets are impacting your investments? We believe we offer a better way of risk managing client money. My apologies as this is a delayed post of our newsletter. We sent this to clients on 5/3.

May 2022 Money Conversations Good morning and welcome to the May edition of Money Conversations. We hope this finds you well enjoying the warmer weather. Below you will find our thoughts on the curre

06/03/2021

Incentives, especially those related to monetary compensation, matter. In this month's video I am discussing how incentives have led to many issues within the world of finance this century, some intended and some unintended. I also discuss why it is important to understand how the people we do business with are incentivized.

06/03/2021

Here is the June newsletter. This includes my current market commentary as well as a video discussing how incentives can be used to direct behavior and why they are important to understand especially for the people we do business with.
https://conta.cc/2RTit6B

June 2021 Money Conversations Greetings and welcome to the June edition of Money Conversations. Below you will find some thoughts on the current market environment and a video discussing how incenti

05/05/2021

For this month's video I am visiting about many of the recent conversations I have been having with people who share concerns about the potential for a market pull back. In conjunction I am sharing my thoughts in relation to how I am seeing the worlds of speculation and investing converge.

05/05/2021

Here is the May newsletter. This includes my current market commentary as well as a video discussing how I see investing and speculation converging.
https://conta.cc/3unVyOF

May 2021 Money Conversations Greetings and welcome to the May edition of Money Conversations. Below you will find some thoughts on the current market environment and a video discussing speculation v

04/08/2021

For this month's visit I am explaining how inflation is calculated, what we have already seen as it relates to price inflation on goods and services, and what inflation could mean to investment vehicles.

03/04/2021

Spend! Spend! Spend! That seems to be the current plan for our government for, well, everything. For this month's conversation I am trying to explain Modern Monetary Theory - which seems to be the main driving force behind current monetary policy decisions within the government.

03/04/2021

Market Commentary:
The S&P 500 finished the month of February up 2.5% after being up 6.44% at the high point for the month. This brings the two month and year to date return of the S&P 500 to 1.44%. For the second month in a row the index sold off at the end of the month. I can't necessarily identify any correlation between the two month ends but it is something to note and look back on if it turns into a monthly trend.

One thing that is easy to identify that is changing is the yield or interest rate associated with the US Treasury 10 Year Bond. It has increased quite a bit and you might have noticed an increase if you have checked mortgage rates in the last week. The 10 year yield has increased 128% off the September lows and finished the month of February up 54.54% for the year. 1.44% is still a very low historical yield but the increase to this level has happened quickly. With debt being very much a key driver in our economy and the world for that matter, the rising cost of borrowing can absolutely be classified as a head wind for pretty much everything. This was the narrative being thrown around from the financial news institutions at the end of February for why the stock markets were selling off. The real question is why bond yields are rising when the Fed's goal is to keep them low. The likely culprit is inflation.

Inflation has been something I've been watching for since the government began printing money last spring. While inflation didn't show up immediately, it's pretty easy to identify the increase in commodity prices that started last June. We have also seen increases in the price in land, real estate, and commodities like lumber. Prices in energy have also been rising this year which you might have noticed in the price of gasoline. While the Fed says they aren't yet concerned about inflation I can assure you that they are monitoring it closely. If rates continue to rise watch for them to increase their bond purchases in longer maturity bonds.

I do think inflation could be a major head wind for the stock markets at some unknown point in the future but for the time being it hasn't been a major factor. That said, the government is currently deciding on an additional $1.9 trillion spending package and waiting closely behind it is a $3 trillion infrastructure package. That's a fair amount of money creation that we can add to last year's massive print job. In this month's video below I am expanding on how the people in power view their ability to spend and create money based on Modern Monetary Theory (MMT). Within the framework of MMT lies the pretense that deficit spending and national debt really don't matter. Who knows? Maybe they are right and the UBI (universal basic income) people are too. As always, time will tell.

I think the one thing we can count on (besides death and taxes) is that the people in power will continue to spend. Since last summer this spending has been of benefit to holders of stock market instruments as well as other assets with a negative correlation to the US Dollar. We don't know how long this trend may last (risk happens slowly at first and then all at once) but that is why we monitor all facets of the marketplace daily. I believe that as we progress into this unfamiliar future with unlimited money printing that the ability to adapt to changing market environments will be a key component of efficient money management.

Shawn M. Wyatt, CFP®, CRPC®

StockCharts.com 2.26.2021
The views and opinions expressed are that of the author and do not necessarily represent the opinion of any broker dealer. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal.

02/09/2021

For this month's conversation I am attempting to breakdown/unpack some of the fears I am seeing in people in relation to the new administration in power. Just the musings of one man and how I see things...

02/09/2021

Market Commentary:
The first month of the new year is behind us. The S&P 500 finished the month of January down 1.38% after being up 2.82% at the high point for the month. I do not have concern that this will start a downward trend for the year though. We have many positives ahead of us including what is assured to be our best GDP number ever in the second quarter (after experiencing our worst last year). Corporate earnings should look favorable for the first quarter and then look really good for the second quarter before possibly slowing down again as we get into the second half of 2021.

Headwinds do remain but most of the economic uncertainty we faced over the last 12 months, I believe, is behind us for now. As I look at it, there are many positives and opportunities for investors as the economy begins to awaken from its forced slumber in 2020. I expect that the potential negative effects of political uncertainty will be far outweighed by the monetary policy of the new administration, which really just picks up where the previous left off from a spending standpoint. Last year was the largest spending deficit on record and I'm sure 2021 will remain as close to those levels as possible. The nice thing for investors, regardless of political tribe, is that government spending seems to find a way to benefit the investor class. Unsure if you believe me? Can you remember a year like 2020 where the economy as a whole basically shut down, where we had record unemployment levels, and where we also hit market record high after record high? I can assure you that additional government spending measures will be "needed" and that those spending measures will also find a way to help provide liquidity to the financial markets - much in the same way the did in 2020. I would hope that this would give you some peace of mind as it relates to the change in administrations. I have further expanded this topic in this month's video. It really seems to me that our true "viral" issue is that of distrust and fear, much of it as I see it misplaced.

Most of the forward looking projections I pay for are pointing to a nice first half of the year for investors. This is of course isn't guaranteed but I have a high level of trust with these firms based on the calls they have made in the past. This positive view may change as we get further into the year and if that begins to affect the markets I will be sure to adjust account holdings as needed.

Until next month, stay healthy my friends - mind, body, and spirit. Take care of yourself and each other.

Shawn M. Wyatt, CFP®, CRPC®

StockCharts.com 1.29.2021
The views and opinions expressed are that of the author and do not necessarily represent the opinion of any broker dealer. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal.

01/12/2021

To start the year I am speaking about what we are seeing happen to the value of the dollar in relation to other world currencies and how to protect the perceived value of your wealth. I have spoken on inflation and currency devaluation in the past but we are actually seeing it play out in real time right now.

01/12/2021

Market Commentary:
As awesome as 2020 was for most of us, I'm glad that we are moving on. The next year will hopefully bring peace, healing, and a reminder that we are all Americans first and foremost. I keep coming back to the fact that so many of the people I interact with want to see changes. I know it seems too simple to say that if you want to change the world, first change yourself. But just because it is a simple phrase doesn't mean it isn't inherently true for all of us. I'd bet if you spent just a few moments ruminating on the things that you are thankful for that you would find yourself feeling better, even if you already feel great about things. Love really is the answer to all the hate we have been inundated with. Enough already with the divisiveness from everyone that is putting it out there. We all see the world differently, and that's ok, we all have different life experiences that frame how we see the world. Lead with love, for yourself first, and you will find that it reshapes who you are at your core. You will find it changes the internal conversation going on between your ears. You don't have the capacity to change the greater world, and that too is ok. Start your day with gratitude and find ways to make yourself of service to others. This is the way of Christ, the way of love and the only way that will find you on a happier and more peaceful path. Alright, I'll get off the soapbox, on to the money.

December saw the S&P 500 set another series of all time highs and finished the month up 3.77% for a yearly return of 18.4%. Hopefully you too are pleased with the growth you experienced with your money. The interesting thing about the last 12 months is how certain assets, namely the more conservative in nature, really left a lot to be desired. Stocks and bonds both experienced losses in the crash brought on when our country was shut down in March of 2020. But stocks, unlike bonds, saw a quick recovery of principle and then very good growth beyond that. Bonds have seen their prices stabilize but haven't experienced much growth beyond the crash last spring. With interest rates rising to start 2021, bonds still have a headwind. I am a firm believer that what you own and when you own it matters. The typical diversified portfolio, like a 60/40 allocation, has seen and likely will continue to experience some drag as we move through the first quarter and likely beyond. The reason I believe that to be the case is due in part to what our Federal Reserve and Treasury Department continue to do monthly. Print money and buy bonds - roughly $120 billion monthly. Their goal is to fix interest rates (stabilize bond prices) and keep plenty of liquidity within the credit markets. This has proven to be more favorable to equities than to fixed income instruments as we have seen the last 9 months. Until that course is paused or reversed this will likely continue to be the case. This forces investors into risk or riskier assets to find their desired returns.

I would also like to speak to the massive amount of dollar bills that have been created and what that means. I have done so for the monthly video. It's been a while since I really spoke to the impact of currency devaluation so this was an enjoyable video to make.

As far as our continued move into 2021 and what that means for our portfolios, I happen (as indicated above) to believe that certain assets will likely provide for more growth or value retention than others. I suspect land, real estate, certain equities/stocks, possibly gold, oil, and crypto currencies will all have the opportunity to increase in value as the value of the dollar declines - although nothing is guaranteed or course. Throughout the back half of 2020 and to start this year, pretty well all assets have gone up (bonds have at least held their ground) other than the US Dollar. Which tells you that the movement up in many assets is a trade against the US Dollar. We don't know when that might change but for the time being riskier assets appear to be the space providing more growth and value retention. That said, change is the only thing we can truly count on and the ability to change course or adapt is still an important aspect of money management in the new year. This current course won't last forever and I will adjust client accounts as necessary.

Until next month, stay healthy my friends.

Shawn M. Wyatt, CFP®, CRPC®

StockCharts.com 12.31.2020
The views and opinions expressed are that of the author and do not necessarily represent the opinion of any broker dealer. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal.

12/11/2020

Market Commentary:
The S&P 500 experienced its best November ever with a return of 11.8%, providing investors with much to be thankful for. Year to date through the end of November the S&P 500 is up 13.3%.

If you are questioning how the market can be doing so well as Covid cases are flourishing and setting records and the presidential election sees lawsuit after lawsuit, you ain't alone. Given everything we have been conditioned to know about how markets are supposed to function, the S&P 500 continuing to set new record all time highs (ATHs) seems to be a little fishy. After all, isn't the market really just an indicator for how healthy the economy is? Not right now, would be my answer. It's not to say that certain sectors of our economy aren't doing well, but typically for a market that is setting this many new ATHs you would see much more of the economy doing well. Markets being this high don't really line up will with a country that has put a moratorium on evictions. So what is it then, why do the returns keep going up in the face of so many headwinds?

That seems to be the question that many don't really want an answer for. At the end of the day the goal of investing is to make money. You don't need to necessarily understand exactly why markets are going up, you just need to be positioned to grow with them. That is certainly one perspective anyway. I do think it helps to understand why markets are doing what they are doing as understanding aids in positioning and sizing within a portfolio. That said we have never seen this many dollar bills created this quickly, at least not in my lifetime and definitely not in my time of managing money.

How much money has been created in 2020? That is the question and the answer does help to shed some light on the why the market keeps going up. First, let me provide you with the definition of the M1 U.S. money supply.

"M1 is the money supply that is composed of physical currency and coin, demand deposits, travelers' checks, other checkable deposits, and negotiable order of withdrawal (NOW) accounts. M1 includes the most liquid portions of the money supply because it contains currency and assets that either are or can be quickly converted to cash." - Investopedia

Now that you understand what M1 means we can continue. The M1 supply has increased approximately 58% so far this year. Another way to say it is that 35% of all US dollars in existence have been printed in the last 10 months. Read that last sentence again for good measure. 35% of all the money denominated in US dollars has been born since March.

Our government's printing press has been on almost a 24/7 run this year. Yes some of that money has been given to individuals and families as well as businesses including corporations. We can also assume that some of it has made its way into financial based products like stocks and bonds even though we have no way of knowing exactly how much and where. Markets go up based on buying and down on selling, at the most basic, and if there is an almost unlimited supply of dollars to buy with...they go up even if the economy as a whole isn't healthy enough to justify ATHs.

If we don't experience inflation as part of this massive currency print job then I couldn't fathom what could possibly cause inflation. That said, if inflation does show up those that hold stocks, gold, Bitcoin, and real assets like real estate and land should see the price of their assets go up. This isn't guaranteed of course but you can assume that as the value of the dollar goes down that you would need more dollars to buy real estate and land or stocks. This is why inflationary periods tend to hurt the "haves" less as they have assets that increase in value to offset the decline in the currency.

There is no way for me to know for sure if that is what we are experiencing now, only time can tell that for certain, but I also can't rule it out yet. Those that hold cash during times of inflation will end up feeling the pain. Risk assets tend to grow with inflation so those taking risk may not feel it as much. I've said it before so I'm sorry to repeat myself but if we don't have any inflation after creating this much new money, if there is no pain, then we really need to ask ourselves as tax payers why we are paying taxes. Let them print their operational capital.

In the mean time my commitment to you as a client is to monitor the markets in conjunction with the A.I. system I utilize to appropriately react to changes in the market environment.

I hope that the Christmas season allows you to see the many blessings that are no doubt already within your life. Until next year, I thank you again for the opportunity to serve you and your family.

stockcharts.com [11/30/20]

The views and opinions expressed are that of the author and do not necessarily represent the opinion of any broker dealer. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal.

12/11/2020

For this month's conversation I am speaking about the importance of escaping. Escaping from the daily grind. Escaping from the thoughts that keep you down or unmotivated. Escaping from social media. Escaping from the "news" stations that are really paid for opinion stations. Escaping from blaming your problems on others. What could you be if you allowed yourself the ability to escape and form a new path?

11/13/2020

Here is a non political, non narrative, data based view on where things stand with Covid. We are all in this together, spread love.
Click the link for the data.

11/10/2020

For this month's conversation I am visiting about the most important aspect of creating wealth. It is a simple topic for sure but in practice it is anything but simple for most people. Why? That reason is different for everyone.

11/10/2020

Market Commentary:
The S&P 500 experienced its second losing month in a row shedding 2.79%. Year to date through the end of October the S&P 500 is up 1.68%.

As of this writing (11.6.20) November's market performance has started strong. Through 11.5 the S&P 500 has gained 7.21% for the month. The gains have come amidst yet another highly contested election for our country. Volatility was high to start the month and has tempered somewhat yet still remains high compared to normal. 2020 hasn't been all that normal, so I guess I could say for 2020 volatility has come down somewhat back to normal standards for the year.

The election, as I am typing, is still being counted on the presidency side of things although it is starting to look more favorable for one candidate. Will see how things come together. I have fielded many questions this week on what would/could happen when/if one party wins. At this time my answer is this - probably not much will change from a monetary standpoint. It appears as thought the blue team will retain majority of the house and the red team the senate. This creates a situation that is favorable as far as I'm concerned, in that nobody gets everything they want. Balanced if you will. Many people are very concerned about markets crashing if the blue team takes the White House. Please let me remind you that there are many wealthy democrats who owns stocks along side you and they don't want the markets to do anything other than go up over time. No one in power likes declining markets regardless of political lean, nor do their donors.

The Federal Reserve remains in charge of the green team and have once again stated they will continue to do what they can on the fiscal side of things to help keep markets from throwing another tantrum. This means they will continue buying assets in the 12 figure range each month. 12 figures is in the 100s of billions per month. Their balance sheet continues to grow and started November at less than $10 billion from their all time high set in June.

As I stated last month and as the Fed has been begging for for the last couple months, Congressional spending is still needed in the form of a stimulus. Without this, as Covid once again shuts much of the world down, we can assume a strong possibility that market volatility may increase. To the tune of what we experienced in March? That is impossible to say but what I can say for sure is that headwinds remain. Strong headwinds. Many companies and entire industries are still barely hanging on. Layoffs continue and balance sheets are deep in the red for the year. If it wasn't for 5 stocks the S&P 500 would be negative for the year so the majority of companies are not in a healthy space cash flow wise.

What turns things around and sets us all free again? Likely only a vaccine will do that. I won't be on the front end of receiving something that has been fast tracked. That said, many many people will and if there is indeed a working vaccine by year end, as many hope, we may have a return to normalcy in 2021. Probably not until deep in the first quarter and more likely in the second quarter. If the vaccine does come to fruition I would expect a great run in all world markets.

First though, we must get through this election ballot counting season. If you feel like you got what you wanted out of the election don't gloat and if you didn't don't whine (or wine if it's in your glass). Things are never as good as they seem and things are never as bad as they seem. Regardless of the outcome the sun will continue to come up and set and over time the markets will want to go up.

stockcharts.com [11/5/20]

The views and opinions expressed are that of the author and do not necessarily represent the opinion of any broker dealer. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal.

10/06/2020

Market Commentary:
The S&P 500 experienced its first losing month since March losing 3.88%. Year to date through the end of September the S&P 500 is up 4.47%.

I believe the majority of the decrease last month was due to the fact that much of the money the government had provided businesses and industries this spring was running out. Thus we are seeing another wave of furloughs and layoffs taking place as October begins. The markets are simply reflecting the potential decrease in consumerism as more individuals enter the ranks of those without a paycheck. Beyond that I can't point to one specific reason as to why market volatility began to rear it's head again. That said it is absolutely something to watch as the positive trend the markets had been in since March 23rd seems to have suffered a bit of a set back. If the government/congress can come to terms on another round of government spending that positively impacts both business and their ability to pay their employees as well as positively impacts individual consumers, I would expect that this market pullback will be short lived. If our illustrious leaders can't come together on a spending/stimulus plan I would expect continued downside market volatility. It seems crazy to think that the success of our economy and markets hinge on our government creating more of a deficit/debt but alas that is the world we are living in now in 2020.

The Federal Reserve continues to buy market based securities in their attempt to keep the credit market both attractive but also stable. They increased their balance sheet again in September but are still slightly lower than where they were to begin June. They have adamantly expressed their support for the markets but have also made it clear that without government spending they can only do so much to support the economy.

I do have concerns about how all this new debt works favorably for all of us over the interim to longer term time frame but have resigned myself to the fact that without it my industry would likely be in extremely rough shape. This would likely translate to my clients' accounts being much lower in values than we experienced during the low in March. So at least for now the debt load/bailout is benefiting investors. As I have explained to many of you this year during our review meetings, the bailouts that my industry continues to receive absolutely benefits investors or the haves. The people that don't have any investments, which is actually the majority of the population, don't really see a benefit and in fact experience a decrease in their purchasing power. So as we investors reap the benefits of government spending it's important we remind ourselves that there are a great many good people in this country that are really struggling and hurting.

My commitment to clients remains steadfast. So long as the market conditions are favorable we will look to be positioned to take advantage of favorable conditions. Should that change I will look to make appropriate changes to be more defensive.

Until we connect again my hope for you is health and happiness.

stockcharts.com [9/30/20]

The views and opinions expressed are that of the author and do not necessarily represent the opinion of any broker dealer. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal.