KCM's Komments

February 2021

The search for income, as well as the traditional concept of reducing portfolio risk via asset class diversification, has been tested quite hard during all of 2020 and the first 2 months of 2021. However, there is positive sentiment that with the expansion of COVID-19 inoculations, a return to more normal social interaction, slow but steady travel increases, slow rises in interest rates, limited inflation growth reflecting positive economic growth, and more Federal stimulus we shall see further stock market growth both in the USA and in the Emerging Markets. Bond prices with longer maturities will slowly fall to reflect higher interest rates but coupons on new bonds will be higher, as will mortgage rates which have begun to climb back towards historical levels.

For February, our Real Estate Strategy was the winner with about a 4.5% return versus the Dow Jones Real Estate Index at 2.6%. The next best return was from our All Cap Multi Style Strategy for US stocks at 4% versus the S&P 500 Index at 2.7%. Our Large Cap Value Strategy (US stock picking) also had a positive return of about 3.3% and our Emerging Markets Strategy for foreign stocks was up about 1.1% . Only our Fixed Income Strategy was down a touch at -0.8% which was pretty good given both Treasuries and Municipals were down over 1% each with longer maturities doing worse as one goes out the maturity ladder.

We are, and shall remain, fully invested. Clients getting payouts (like the 2021 return of the IRA required minimum distribution “RMD”) and periodic cash flows to live on, all got there money as expected.

Our merger of portfolio management and administrative support with Smithbridge Asset Management is going smoothly and, as previously promised you, no one should expect any changes in portfolio strategy, cash flow, fees or access to James V. Kelly as your portfolio manager. In early April, you can expect your 1st quarter 2021 KCM-KOMMENTS and performance report will come from Kelly Capital Management, LLC as in the past. We shall keep you updated on progress and look forward to introducing our new colleagues from Smithbridge to you by phone and in person as the COVID-19 issue resolves.

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