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June 16, 2022 Market Volatility Commentary

A number of years ago Julia and I attended an industry conference and one of the presenters, discussing the markets, was a man that had been on US Airways flight 1549 that landed in the Hudson River. He equated the experience that he’d gone through to that of the markets when it experiences a sell-off. He said, and I paraphrase, “when we were taking off everyone was doing their own thing. As we began to have issues people started to focus on what was going on, and as we crash landed in the river everyone was focused on the same thing. We had all become correlated in our thinking.”

The same can be said for what we are now experiencing with recent market volatility. When the bull is running, investors are all doing their own thing, buying what interests them, adding to asset classes that vary from each other. Then, when things soften and economic concern comes into the picture, investors begin to focus on similar data when making their investment decisions and finally, when we are in a bear market, everyone is focused on the same things and most assets and investing strategies become correlated, exacerbating the sell-off until it shakes itself out.

This year has followed that pattern. Many came into the year feeling good about the economy and the markets with some (like us) griping about valuations and earnings growth. As the year progressed, inflation became hotter as COVID related stimulus, which created excess dollars, bumped up against lingering COVID related shortages and delays, resulting in too few goods. The war in Ukraine escalated those effects, pushing commodity prices up, so more and more investors began to pay attention to CPI and what the Fed was doing and saying. Now, squarely in bear market territory, we are experiencing a nearly perfect correlation in investor sentiment around fears of a recession and the desire to get out of its way.

Emotionally, it’s difficult to ride through a bear market but this is not the first time for many of us. In the 30 years I have been a financial planner, this is now my fourth bear market, and the fifteenth bear market in the Post WWII period. Historically, bear markets on average have lasted 9 ½ months from peak to trough, though there have been bears as short as one month, like the one we experienced in 2020 due to COVID. The decline in bear markets has ranged from 20.6% down to a whopping 51.90 % down during the Financial Crisis.

For these reasons, it’s during periods like these that we encourage thinking like a contrarian because after every bear market in history a new bull market has emerged, with recovery periods ranging from 6 to 36 months, with the longer recovery periods associated with more major structural dislocations.

While it will sound odd, we feel that this time around we have a garden variety bear market. It is not being driven by a breakdown of the financial infrastructure (the Financial Crisis) or valuations that were astronomically high (the Tech Bubble), but more a market that had gotten a little ahead of itself in valuations facing an economy that needs to slow down to get inflation under control. Thus, a repricing of risk. 

And with repricing comes opportunity, though it will take time for that opportunity to realize future gains. These sell-off periods are the times we tactically add to positions that we have long term conviction in, be they stocks or bonds, mutual funds, ETFs or individual holdings. Thinking like a contrarian, we use these periods, when most are fleeing markets, to bring into portfolios holdings that could benefit us for years to come. And do so more cheaply. 

These are also the times that, as your planners, we test and retest your plan and your projections to make sure we remain on course for your goals, have enough cash on hand for necessary withdrawals, and have a strategy for creating liquidity in the event an unknown need pops up. We will revisit your tolerance for risk and make future adjustments, engage in strategic tax-loss harvesting if possible, and stay abreast of the causal factors impacting the economy and markets. 

While we may have more selling to go before finding a bottom, the S&P 500 is now down 24 % peak to trough and valuations are now much more reasonable with the S&P 500 selling at 15.5x times 2023’s expected earnings. Meanwhile, the Fed is taking aggressive action to put the brakes on the economy to cool inflation, which we feel will recede some by year end, and there remain positive economic factors that should help the economy continue its future growth such as low unemployment, solid wages, household balance sheets with high levels of cash, corporate balance sheets with high levels of cash, States and municipalities fiscally stronger than they have been for many years, and the Infrastructure Bill. 

We know that the market is forward-looking, or at least that it tries to be, and we know that it dislikes uncertainty. At some point, that uncertainty will lessen, and we will have a better view of exactly how entrenched inflation really is and then investors will stop focusing exclusively on that and start considering all these positive factors as they look ahead to 2023 and what a recovery might look like, and the recovery cycle will begin again.  

Between now and then, we are here to answer any questions or concerns you may have about the markets, the economy, your planning and your investments. Please reach out to us if you want to review any of these things and we’ll walk through them together.

Take Care


About Us

Our mission at Northstar is to value and protect, above all things, the trust that our clients have placed in us. We do this by acting with integrity, always being accountable for our actions, and consistently applying and expanding our expertise. Our team of professionals has been dedicated to this mission since our founding in 1996. Everything we do, from financial planning to investment management, is driven by our client’s needs. Helping them to define their most important goals is our main focus.

Our clients often have complex financial lives that require an experienced hand for guidance and execution. They place trust in our entire team because we work as one unit, with the capability to service and support the financial concerns of a variety of clients.

Professionals, executives, and business owners use our services to organize and monitor their financial lives. Our experience with pensions and governmental plans helps us provide planning services to both active and retired military members. And our level of expertise allows us to guide the financial decision making for trusts, qualified plans, and nonprofits.

Steven B. Girard

Steven is the President and principal of Northstar Financial Companies, Inc. His long-term approach to financial planning and investing has helped numerous clients achieve their goal of a life lived well. As the leader of our firm, Steven is responsible for developing the planning strategies used by our clients as well as our firm’s overall philosophy and guiding initiatives.

Before founding Northstar in 1996, Steven earned a bachelor’s degree in English from the University of New Hampshire and began his financial services career at MetLife. Wishing to provide his clients with independent thinking and personalized strategies, Steven decided to create his own firm focused on delivering tailored financial services in an ethical manner.

He is currently studying and fulfilling requirements for the rigorous Certified Financial Planner™ certification.

Julia Randall
Financial Advisor/Chief Compliance Officer

Julia is a financial planner and a registered Investment Advisor Representative with Northstar, providing clients with day-to-day support and enabling them to maintain or modify their plans as situations dictate. A detail-oriented individual, she guides clients through a high level of active communication. Julia believes that consistent monitoring and making timely adjustments is an important part of a successful plan.

Julia earned a bachelor’s degree in Communication and English from Temple University. A 20+ year veteran of the financial industry, she brings both management experience and hands-on investment knowledge to the Northstar team. She often coordinates with attorneys on complex estate plans and gifting strategies for high level executives. Her goal is to help bring clients confidence in their planning and a greater understanding of the financial system.

Julia lives in Pennsylvania and enjoys cycling, hiking, camping, kayaking and generally spending time outdoors with her husband Jeff, her two grown boys and her friends.

Alex Bastron
Financial Advisor

Alex is a financial planner and asset manager with Northstar. He believes that everyone’s situation is unique and requires a customized solution in order to achieve financial independence and other important life goals. Alex strongly feels that effective and ongoing communication is paramount in any relationship. Beyond that basic relationship need, confidence and comfort in an investment plan and investment portfolio can only happen through proper communication.

Alex earned his bachelor’s degree in Finance from the University of Northern Iowa and has been working in the industry for more than 15 years. He and his wife, Tasha, enjoy all the activities that the Colorado mountains offer and love their dogs, Chloe and Titus, more than they should. They also enjoy spending time with family and attending concerts and sporting events.

Alex is currently completing requirements to attain the professional designation of Certified Financial Planner.

Thomas Tuskey

Thomas is registered with Northstar as an Investment Advisor Representative (IAR) and currently serves as Paraplanner to both advisors in the Pennsylvania office. He is a member of both our Investment Committee and our Compliance Committee, and is looking to grow into a purely Advisory role as he gains more industry experience, while also studying to become a CFP Professional.

After graduating from The Rutgers Business School in New Brunswick, Thomas began his professional career with Northstar in 2018 as a Client Service Specialist. He prides himself on relentless attention to personalized client service. Thomas loves cultivating new relationships so please feel free to say hello!

Currently residing in Pennsylvania, when he is not working you can usually find Thomas back in New Jersey spending time with his family and friends, cooking something delicious, or studying the financial markets.

Melissa Gemmell
Operations Manager

Melissa is the Operations Manager at Northstar and is a member of the Compliance Committee.   She is responsible for managing all the day-to-day needs for the office and staff including record keeping, software systems, custodian relationships, vendor management and staff training.  Additionally, Melissa works closely with advisors on life insurance cases and is the primary contact for a number of our industry relationships including brokers and general agents.

Melissa graduated from Rivier College in New Hampshire with a bachelor’s degree in Human Development in 2010.  She began her career with Northstar shortly after and has been a part of the team for 11 years.  Melissa is currently working toward her Series 65 so that she is also able to work in an Advisory capacity at some point.

Melissa resides in Pennsylvania with her husband, Rob.  She enjoys yoga, going to the beach, walks, and spending time with her husband, friends and family.

Jovante Anderson
Client Service Specialist

Jovante is the Client Service Specialist at Northstar. As the first point of contact at Northstar, he’s responsible for assisting clients with their day-to-day needs such as managing account paperwork, handling process delays with our brokerage partners, and ensuring every question the client has is answered.

Jovante brings with him a solid understanding of tax preparation as well as experience with client service through his previous work with H & R Block, and he is excited to expand his understanding of financial planning and asset management as he further develops in his role.

When he isn’t at work, Jovante can be found biking around his neighborhood, cooking for his family, or playing video games.

Lauren Cuddeback
Director of Business Development and Client Relations

Lauren is the Director of Business Development and Client Relations for Northstar Financial Co. She generates new growth opportunities by developing and cultivating partnerships with new and prospective clients.  Lauren’s understanding of Northstar’s financial planning philosophy, strategy, and solutions allows her to strategically find new, long-term opportunities.  She works side by side with her team to facilitate the financial planning process from start to finish.

Lauren earned her Bachelor’s Degree in Education and English from University Delaware where she also played on the Varsity Lacrosse team.  Originally from Wayne, PA, Lauren lived in New York City for five years where she pursued her career in Insurance sales.  She returned to Philadelphia and now resides in Conshohocken with her English bulldog, Barb.

Lauren takes pride in her passion for meeting new people, building strong connections and being involved in her community  A true self-starter, Lauren likes to bartend, teach indoor cycling classes and participate in local Conshohocken community events.