These markets continue to shock and awe. Aside from the entertainment value, there is plenty to keep an eye on.
With that in mind, see below four themes we are watching closely for the remainder of March, as well as our
current asset allocation tilts.

Value Surges as Tech & Growth Give up Some Gains
The Growth vs. Value debate within US equities has been one of the hottest topics in the investment world
for the past 6 months. After nearly a decade of Growth outperforming Value, the US economy’s recovery
following the COVID-19 Crisis has created an environment where traditional Value companies have begun
to make up ground on the high-flying Growth companies. Since November 9th, 2020, the Russell 1000 Value
Index has returned +18.22% while the Russell 1000 Growth Index has only returned +8.24%.

*Performance data is from and as of 3/16/2021*

Implementation:Within our in-house investment models, we decreased our growth weightings in favor of taking a balanced
position between Growth and Value. Our US equity allocation tilts towards Value, where our ex-US equities
tilt towards Growth. In general, we believe Small & Mid-Cap companies will continue to benefit from the
recovery of the economy over the next 12-18 months while growth companies will continue to see
consolidation. Outside of the US, we still believe the best opportunities will be in companies focused on

How Stimulus Checks May Affect Equity Markets
With the recent passing of a third Stimulus bill on March 10th, another round of direct payments will be
making their way to qualified American Citizens. One popular topic amongst the Investment community is
how American’s who receive the stimulus check will be deploying the funds. A recent survey taken by
Deutsche Bank Securities showed that 37% of Americans who receive the stimulus check plan on investing
the monies into equities, equating to over $170 Billion of inflows into equity markets.

The popular conclusion on this topic is that a majority of these inflows will be directed towards securities
that have received a high volume of press over the past several months, such as GameStop, AMC and
others. It is also thought that there will be significant flows into speculative investments such as SPACs and
Cryptocurrencies. We do not speculate in these areas.

In any event, we have not made any rotations based on the passing of the most recent Stimulus Bill. We will
continue to monitor the markets closely, and we believe additional stimulus is generally supportive of
equity markets.

Vaccine Rollout & Economic Optimism
One of the most uplifting storylines so far in 2021 has been the sharp decline in COVID-19 cases and deaths
in the US. As the vaccine rollout continues nationwide, cases and deaths have continued to decrease,
showing that we may finally be on the road to normalcy. It is estimated that around 107 million Americans
have received at least one vaccine dose, with approximately 40 million of the 107 million receiving full
vaccination. The goal set forth by the federal government at this point is to provide vaccine access to all
Americans by May or June of this year.

From an economic standpoint, the vaccine’s timely distribution has been incredibly positive for a national
(and global) economic recovery, with most major Banks & Investment Firms adjusting GDP projections
upwards for 2021. For example, Goldman Sachs boosted their 2020 GDP forecast to 6.8% in the US, which
increased from 6.6% earlier in the year.

As mentioned in the first section above, we believe a robust economic recovery will likely lead to continued
outperformance of traditional Value companies over Growth companies and have positioned our US equity
allocation to take advantage of that.

Developed Markets (Ex-US) Going Strong, Emerging Markets Cool Off After Hot Start to 2021
After a strong surge during the first six weeks of 2021, the Emerging Markets asset class has cooled off
considerably. From January 4th to February 16th, the MSCI Emerging Markets Index returned +10.76%.
Contrarily, from February 17th to March 16th the Index fell -6.25%, netting out to a year-to-date return of +4.9%.
The recent downturn can be attributed to surges in US Treasury Yields and the corresponding strength in the US
dollar, putting downward pressure on Emerging Market currencies (and the companies that primarily use those

*Performance data is from and as of 3/16/2021*

We are turning cautious on the Emerging Markets asset class despite our belief that the recent strength in the
US Dollar will be short-lived and that the US Dollar is in a secular downtrend. We will note that Emerging
Markets remains undervalued from a Price/Earnings perspective when measured against most other major
indexes (see chart below). We will continue to watch these asset classes closely and believe that the activelymanaged funds we utilize in this space will continue pursue attractive opportunities.

Pulling It Together: Asset Allocation Recommendations

Overall: Overweight stocks relative to bonds when risk tolerance allows


  • Balanced Value and Growth
  •  Balanced between the US and Global
  • Overweight US Small & Mid Cap relative to Large Cap
  • Overweight Internation00984007al and reviewing Emerging Markets


Fixed Income

  • Overweight Multisector and Convertible bonds
  • Underweight “Core” bonds, including Treasuries
  • Balanced Investment Grade and High-Yield

We will continue to frequently review portfolios to ensure that they reflect our best and most current ideas. As always, if you have any questions or would like to discuss the above topics further, please do not hesitate to
contact us.