Welcome to the first edition of the PWM Perspectives, A Monthly Brief. We are pleased to share a short snapshot on the markets, investment ideas, key numbers and indicators, and updates from PWM Private Wealth Counsel and Q Wealth Partners, our partner portfolio management firm
- There have been many downturns this decade, but the market keeps bouncing back strongly. The market has recovered from the February-April dip, reaching new all-time highs and prompting investors to consider these new valuations while the world still struggles with tariffs and economic uncertainty.
- In that recovery, the number of incredibly large corporations continues to grow as well. Nvidia recently hit a $4 trillion market cap. There are eight other companies in the United States with a trillion-dollar valuation: Microsoft ($3.8 trillion), Apple ($3.1 trillion), Amazon ($2.4 trillion), Google ($2.2 trillion), Facebook ($1.8 trillion), Broadcom ($1.4 trillion), Tesla ($1.0 trillion) and Berkshire Hathaway ($1.0 trillion).
- Many of the stocks mentioned above are what are known as the “Mag7” stocks, which have delivered staggering returns but also painful losses (see the chart included). It's easy to admire the long-term growth of stocks like Tesla and Nvidia, but it's also easy to overlook how tough the journey was. Tesla's stock price was down more than 70% in 2022. Meta (Facebook) was down nearly 74%.
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- This past year, it could be tempting, with headlines brimming about artificial intelligence (AI) and emerging technologies, to say, “Why not just own the Mag 7?” However, we rarely recognize the emotional toll required to endure multi-month, multi-year declines in some of these innovative companies.
- We also don’t know what the next big name will be. (Nvidia is the largest company in the U.S. – six years ago, it wasn’t even in the top 20!). In our opinion, the more prudent approach as we navigate this volatility and geopolitical uncertainty echoes what Vanguard’s late founder, Jack Bogle, advised: “Don’t look for the needle in the haystack. Just buy the haystack.”
- So, with that in mind, the Q Wealth portfolios stay diversified by owning large index-tracking funds and strategies across different geographies, sectors, and themes. The funds also have investments in dividend-paying and other cash flow-focused strategies. Diversification in these portfolios also encompasses various asset classes, including public fixed income, private credit, and strategic alternative assets.
We trust this inaugural edition of the PWM Monthly Memo has provided valuable insights into market dynamics, investment opportunities, and key financial indicators. We are committed to keeping you informed with timely updates from PWM Private Wealth Counsel and Q Wealth Partners.
While the markets never truly sleep, we encourage everyone to take time to disconnect, recharge, and spend quality moments with family and friends. Stay safe, stay informed, and enjoy your summer!
If you have any questions, please don't hesitate to reach out.
