Moore Financial Solutions First Quarter 2021
Tyler A. Moore • April 1, 2021
Q1 2021 is now in the rear-view mirror, and it left us with a lot to review. This quarter brought an unprecedented amount of “firsts”. This is the first full quarter of Moore Financial Solutions, and I am proud to bring personal management with a cutting-edge platform. I would like to continue to welcome you to Moore F.S. and thank you for choosing to do business with us. You remain my (and our) #1 priority, and I wish to make very clear that I am always able to be reached to discuss your account directly. We see life getting back to some level of normalcy in 2021 and a shift back to consistent face to face meetings. I have missed engaging with you in person, face to face. Four Q1 events will be detailed below.
First, Q1 hosted the one-year anniversary of the start of the pandemic. I consider the start of the pandemic when the Big 12 tournament cancelled games in early-mid March 2020. It was clear we were in unprecedented times regarding society, health, and your investments. Looking back over the past 12 months, we see recovery in equity prices, having moved from approximately 2,237.40 on the S & P 500 on 03/23/20 to 3,972.89 to end Q1, and ultimately falling one trading day short of hitting 4,000 on the S & P 500. Moore F.S. clients did a great job of having faith that equity prices would recover when things were very scary, and I personally thank you for that trust. I remember in March ’20 seeing empty store shelves, lock down orders, and the sight we all became very used to, masks! This was undoubtedly a scary sight, but a year later markets are recovering and are on solid footing.
Second, a Q1 interest rate rise is welcomed news to many investors holding investments that pay dividends. However, the long-term gain of interest rate rises comes with some short-term pain. In the first quarter of 2021, the U.S. 10-year treasury yield nearly doubled from approximately .93% to 1.73%. This increase brings rates back to a more normal level as the 10-year treasury historically has been over 4%. Fixed income and bond portfolios saw price pressure as interest rates rose, as they maintain an inverse relationship of price and yield. When yields go up, Moore F.S. will be able to purchase bonds for you that have higher yields. This is a great thing, but the bonds you already have in your portfolio will lose some price, because they are less competitive in yield to the newest bonds issued at higher yield. For example, a bond that was worth $100 may have decreased to $99 dollars on days interest rates sharply rose. Moore F.S. portfolio management strategy was to continue to hold high credit quality bonds with shorter durations. These short duration bonds did not experience as much negative price pressure as longer duration bonds. Q1 had roughly half a dozen trading days where equity markets were higher, but a rise in interest rates caused a balanced portfolio to be down overall for that day due to bonds’ repricing. Bonds now have a better entry point than they did to start the year, having already experienced the interest rate rises this quarter. We expect interest rates to continue to rise over the intermediate and long term.
Third, “stimulus package” became the talk in mid Q1 as rumors of a $1.9 trillion dollar emergency package drove the market higher. These payouts likely gave consumers a bit more confidence in what was a difficult time for many, and businesses were positively impacted with a jolt of sales. It is still to be determined, and a near term concern of Moore F.S., if these large jolts will spark inflation and to what degree. It goes without saying that the Q1 stimulus package will go down in history.
Last, GameStop. You definitely heard about this monumental market force that had never been seen until Q1 ’21. The number of calls I received questioning the movement was unprecedented. Ultimately, the GameStop movement had little impact on your portfolio and was a phenomenon few expected. As the pressure of many large hedge funds betting against GameStop mounted, the stock price was driven down. Collectively, investors began to drive the price higher by betting in favor of GameStop and buying the shares. As the price began to rise, those betting against GameStop had to purchase the shares to undo their previous short. These dual forces along with momentum traders jumping on board drove the stock upward significantly. Moore F.S. client accounts did not include ownership of GameStop before or at any point during this phenomenon and we remain committed to owning equities of higher current earning companies, generally speaking.
Looking forward, we believe equities will maintain a path to higher levels in Q2. Of course, it is hard to make assumptions in a limited term such as three months. But we believe the American consumer will continue to live their life as if they now have the freedom to leave their houses after a year and will get out and spend money. Optimistically, we see the Federal Reserve keeping a close eye on inflation and continuing to near their 2% goal. A stronger dollar of recent weeks might act as a tailwind for consumers, while inflation has the opposite effect. An infrastructure bill will likely inject more money into the system, and Moore F.S. plans to increase allocation to areas that may be positively impacted. Moore F.S. looks to add holdings of PAVE, a U.S. infrastructure development ETF, to client accounts when appropriate in Q2, as well as small weightings to Columbus McKinnon Corp. (CMCO) and Builders First Source Inc. (BLDR). We plan to continue to hold recovery names such as Carnival Cruise Lines and Red Robin Gourmet Burger through Q2, when appropriate for clients. We see corporate tax rates heading higher and inflation ultimately pressuring companies in Q2. We see the second quarter
of 2021 being less eventful than the first but remain maneuverable within our investment philosophy. Together we make a great team and aim to accomplish your goals.
Tyler A. Moore
913-731-9105
TMooreFinancialSolutions.com
This material has been prepared for information and educational purposes and should not be construed as a solicitation for the purchase or sell of any investment. The content is developed from sources believed to be reliable. This information is not intended to be investment, legal or tax advice. Investing involves risk, including the loss of principal. No investment strategy can guarantee a profit or protect against loss in a period of declining values. Investment advisory services offered by duly registered individuals on behalf of ChangePath, LLC a Registered Investment Adviser. ChangePath, LLC and Moore Financial Solutions are unaffiliated entities.
With many asset classes moving higher in Q3 we hope you were able to take advantage within your account! I’m pleased to be able to review an S&P 500 that was able to maintain a generally upward trend since April 8th, 2025, a day that would not so ironically be the only closing price below 5,000 so far this year, an important statistic we will discuss in greater detail later. As investors weighed a decreasing rate environment in which the Federal Reserve reduced rates, and a weakening labor market, the S&P 500 logged a 7.79% increase (1). Fixed Income rallied with the Moore F.S. largest bond holding (iShares 20+ Year Treasury Bond ETF) increasing about 1.27% within Q3 (as of 09/30/25) and paying another nearly 1% dividend for the quarter (2). With stocks and bonds rallying together over the last quarter, I’ll discuss market moving events within the quarter, lay out my opinion of how investors can consider deploying capital in a highly valued market, provide trading ideas, and discuss our thoughts on why U.S. markets are priced at a premium globally. Tasked with fiduciary* management of hundreds of accounts, Moore F.S. is always strategic about your investment holdings, and attempts to strike a solid balance of risk and reward within each account. The gray-haired veteran’s account looks far different from the client born this side of the new millennium. To support this strategy, we believe that interest rate policy and trajectory can be the easiest variable to monitor regarding the decision making of portfolio construction, which Moore F.S. is proud to do “in house”, instead of using high-cost mutual funds for example. This Exchange Traded Fund oriented strategy typically results in the older client’s asset allocation being constructed of stocks and bonds strategically, and the client of the “new millennium” hosting strategy that is more related to the capitalization of stocks. In other words, in the average environment, Moore F.S. tilts younger portfolios more to small caps (using smaller companies instead of the large ones like you’ll find in the S&P 500). To oversimplify, Moore F.S. set portfolios up to help them better perform when rates fall. We feel strongly that the active management of passive ETF’s can help ensure you’ll have solid asset allocation without using actively managed mutual funds which typically lag.
The stock market carousel continued in the second quarter of 2025, with some investors jumping off, while others jumped aboard. Aiming for a solid return to follow a negative 4.59% Q1, the S&P 500 slated a 10.57% return for our second quarter (1). During this most recent quarter, I leaned on my beliefs mentioned fifteen months ago in my Q1 2024 Moore Financial Solutions review; “we feel that investors unknowingly become more faithful in broad U.S. equities to recover after a downturn.” In that previous review I offered a thought that investors have become more trusting that markets will recover after seeing it happen in the 29 historical bear markets, as compared to the first ever bear market, for example. Though my continued theory is that the average bear market duration will decrease over time (with younger investors portfolio managing more assets and algorithmic trading increasing), even I was surprised by the minor 83-day bear market speed bump that the S&P 500 shook off, given that prior to this the average bear market was 289 days (2). The S&P 500 would go on to close Q2 both positive for the year and at record highs. In this quarterly review we’ll look at how bear markets are rarely the same and how our strategy must evolve. We’ll discuss a stubbornly high interest rate, our positioning for potential interest rate decreases, and global matters affecting the market. It’s been said for years that the stock market takes the escalator up and the elevator down. But why? Simply put, this is the result of the driving forces of selling and buying stocks. If investors are optimistic, they’ll commonly allocate to the stock market in an attempt to grow their money. But too much of this buying is deemed greedy and is a great evil of long-term investing. If investors, however, are fearful, they’ll sell their stocks, (at least the less emotionally committed, shorter term investors), driving the price of stocks lower. We believe Q2 is a great example of the battle between fear and greed, and the only real concern is being wrong on predicting short-term market movements. Over the first six trading days of Q2, investors sharply drove the S&P 500 about 11.2% lower, with panic fueled by President Donald Trump’s April 2nd liberation day announcements (3). A resilient S&P 500 would heal the 11.2% wound in only 17 trading days, leaving behind investors who may have been scared out of the market near April 8th closing lows on the S&P 500 of 4,982.77 (4). This would be the first and only closing price below 5,000 on the S&P 500 from April 20th, 2024, to today’s July 1st, 2025, date. In our opinion, this supports our thoughts regarding algorithmic trading, which likely conducted heavy buying at levels of support below 5,000. April 9th would serve as the third largest one-day gain for the S&P 500 in history, increasing by about 9.5% (5). We view the sudden announcements and emotional reactions in the stock market as a great reason to stay the course in our investments. By staying focused on our long-term perspective, while short-term winners and losers argue over the current price, we’ll be less likely to panic and instead willing to accept an average return, rather than attempt to outsmart the market. Moore F.S. was able to capitalize in some situations by selling bonds and buying stocks, when appropriate. While it is not fully determined who lost what, it is implied that a portion of investors locked in losses in Q2, by panic selling with the herd mentality near April 8th lows. These investors would, as a result, miss out on what would become a fruitful Q2 for those willing to wait the required 84 days and not be emotionally rattled.
