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Dear Clients,

The February update is a few days early due to being out of the office most of next week.

Here in Minnesota this is the time of year where drivers navigate uncertain road conditions and, dare I say, the dreaded potholes. Different weather conditions create havoc on our roads. This year seems especially difficult since temperatures have vacillated between very cold, warmer, then cold again.

As it is with our financial markets.

We began the year off strong with the S&P 500 index higher by almost 5% only to back off a bit and then, once again, regain some momentum. Warm, cold, and warm again. Navigating this market in the short-term will be like avoiding potholes. The financial weather is uncertain and investors can expect unexpected bumps along the way until more clarity around the Fed and interest rates, corporate earnings, and inflation begin to resolve themselves.

Interesting to point out that the more cyclical sectors of the economy, consumer discretion, technology, and communication services are leading the charge in the first few weeks. And that the more defensive sectors, utilities, health care, and consumer staples are lagging, albeit barely in the red. We’ll see if this strategy holds. It is typical at the start of each year that portfolio managers rebalance and the losers from the previous year gain some traction in a new year. Fixed income, as measured by an aggregate intermediate bond index, is likewise up over 3% so far. International equites are posting outsized positive returns as well.

The constructive news is that our portfolios are starting to gain some traction as both equity and fixed income are getting bids. Last year was just so unusual with both asset classes down double digits. Our expectation is for a bottoming out in the first quarter and a reset for a better second half.

John Steinbeck, noted American writer and Nobel Prize winner once said, “A journey is a person in itself; no two are alike. And all plans, safeguards, policing, and coercion are fruitless. We find that after years of struggle that we do not take a trip; a trip takes us.”

Let’s continue to keep both hands on the wheel, with eyes looking straight ahead, avoiding the potholes as best we can.

As always, let us know if you need anything.

All the best,


James K. Tonrey, Jr.
Partner/Chief Executive Officer

Read our past COVID19 Updates

423 South Main Street, Suite E1
Stillwater, MN 55082
651.275.9380/877.275.9380 (Main)
651.275.9381 (Fax)