Bristlecone Blog

Welcome to our Meet the Team post! We’re speaking with Jean-Luc Nouzille, co- founder of Bristlecone Value Partners. Read on to get to know Jean-Luc:

Back in our February 2018 commentary (“Just Keep Swimming”), we briefly discussed the risks of market downturns for people nearly or recently retired. The main danger we identified was called sequence of returns risk. As some of our readers approach retirement, they may wonder: what is this risk and how should they protect from it?

After a dismal end to 2018, stock and bond markets rebounded in Q1, with the S&P 500 delivering its best quarter (+13.6% including dividends) since the financial crisis 10 years ago. Some factors positively influencing investor sentiment included: an end to the U.S. government shutdown, improving prospects for a U.S-China trade agreement, and a shift to more accommodative monetary policy from the U.S. Federal Reserve. Every global asset class represented in our clients’ portfolios appreciated in Q1, and most equity indexes notched double-digit returns (...)

Our financial lives can be complicated. Between monthly bills, medical costs, bank accounts, credit and debit cards, investment accounts, and taxes, for better or worse each of us accumulates hundreds of financial relationships over the course of our lives.

After a 4th quarter correction which bottomed out on Christmas Eve, U.S. equity markets have rallied for 8 consecutive weeks (through mid-February), with the S&P 500 index up 18% over that span (and 11% year-to-date). Small cap stocks rebounded even more swiftly, with the Russell 2000 index up nearly 24% from its December low (16% year-to-date). Investors shrugged off some negative macroeconomic news (December retail sales declined 1.2%, the largest drop since September 2009), seemingly giving more weight to a host of other positive developments.

Global equity markets suffered significant losses during the 4th quarter, which dragged down stock returns across the board for the full year. Our clients’ portfolios, most of which include an allocation to bonds, declined somewhat less. Still, 2018 was unusual in that almost every major investment category experienced a negative total return. The exceptions were cash, US Fixed Income, and TIPs (note: your portfolio’s allocation and results may differ—please refer to your Quarterly Portfolio Review Report).