Second Quarter 2021 Investment Commentary

Global stock markets continued to surge in the second quarter. In our assessment of the macroeconomic backdrop and outlook, we continue to expect a strong global economic recovery over at least the next 12 months. In this quarterly commentary, our Chief Investment Officer, Jeremy DeGroot, reviews the current reasoning for our portfolio positioning, outlook on inflation, and forward-looking scenario analysis on the broader economy and markets.

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Reflation & Inflation: First Quarter 2021 Investment Commentary

Global stock markets celebrated the one-year anniversary of the pandemic-induced bear market low (from late March 2020) with another strong quarter of returns. The first quarter also saw a continuation of the “reflation rotation” trend that has been happening beneath the market surface over the past several months. And while we believe the most likely scenario over the next year at least is a reflationary one, many investors are wondering if inflation will be a threat anytime soon. Chief Investment Officer Jeremy DeGroot addresses this question and discusses the ways in which broad market trends impacted portfolios.

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A Conversation with Guggenheim’s Scott Minerd—Litman Gregory Investment Forum

At our recent Investment Forum, held November 2019, Litman Gregory senior research analyst Jack Chee interviewed Guggenheim Global CIO Scott Minerd. Their conversation touched on Guggenheim’s investing approach, recession risk, the corporate bond market, the trade war, and even immigration. Here are clips of their discussion:

Building a “Slow-Thinking” Team


Drawing off Adam Smith’s The Wealth of Nations and the work of Nobel Prize–winner Danny Kahneman, Scott Minerd was the main architect of Guggenheim’s “slow-thinking” team approach.

Indian Summer


Guggenheim’s Scott Minerd likens the current market environment to an Indian summer. A return of warm weather right before winter common in the Northeast: It usually comes late … and it’s relatively short-lived.

Corporate America: Ground Zero of the Next Crisis


Overleveraged corporate America and the corporate bond market will be the ground zero of the next financial crisis according to Guggenheim’s Scott Minerd.

The Fed: The Only Game in Town?


Scott Minerd: “The source of, and solution to, every financial crisis is the central bank.”

Avoiding the Death Spiral


Guggenheim’s Scott Minerd says all you have to do is look back to 1930 and the Smoot-Hawley Tariff Act to see how a tit-for-tat trade war can escalate into a “death spiral.”

Learning from Australia


Scott Minerd discusses the need for a rational immigration policy that supports entrepreneurship and labor force growth.
Note: These materials are intended for the use of investment professionals only and may contain information that is not suitable for all investors. This presentation is provided by Litman Gregory Asset Management, LLC (“Litman Gregory”) for informational purposes only and no statement is to be construed as a solicitation or offer to buy or sell a security, or the rendering of personalized investment advice. There is no agreement or understanding that Litman Gregory will provide individual advice to any investor or advisory client in receipt of this document. Certain information constitutes “forward-looking statements” and due to various risks and uncertainties actual events or results may differ from those projected. Some information contained in this report may be derived from sources that we believe to be reliable; however, we do not guarantee the accuracy or timeliness of such information. Past performance may not be indicative of future results and there can be no assurance the views and opinions expressed herein will come to pass. Investing involves risk, including the potential loss of principal. Any reference to a market index is included for illustrative purposes only, as an index is not a security in which an investment can be made. Indexes are unmanaged vehicles that do not account for the deduction of fees and expenses generally associated with investable products. A complete list of LGAM’s investment recommendations for the prior 12 months is available upon written request. For additional information about Litman Gregory, please consult the Firm’s Form ADV disclosure documents, the most recent versions of which are available on the SEC’s Investment Adviser Public Disclosure website (adviserinfo.sec.gov) and may otherwise be made available upon written request.