It starts with being one of the world’s largest financial institutions, offices in more than 35 countries, and over a 160 year tradition, Wells Fargo & Company plays a key role in the resources and research available to the clients of Gruver Wealth Management of Wells Fargo Advisors.

Investment Commentary


Asset Allocation Spotlight: Stay Disciplined on the Path to Recovery

by Veronica Willis | Global Investment Strategist of Wells Fargo Investment Institute

Allocations that include higher weights to fixed income experienced losses similar to their declines during the 2007 – 2009 equity bear market and may potentially take longer to recover than growth-oriented allocations. We believe maintaining consistent allocation targets can help in an effort to ensure that the allocation behaves as intended through volatile markets. Income investors should be cautious before increasing equity exposure.  [Read more]


Fixed Income: U.S. Treasury Yields Decline – Long-term Bonds Benefit

by Luis Alvarado | Investment Strategy Analyst of Wells Fargo Investment Institute

U.S. Treasury yields have been trending lower in the first two weeks of the year, influenced largely by the macroeconomic outlook, and the bias remains to the downside. Our tactical move to extend duration has been supported as yields have declined significantly since late October, allowing long-term fixed income the potential opportunity to experience a strong recovery.  [Read more]


2023 Outlook: Recession, Recovery, and Rebound

by Wells Fargo Investment Institute

As investors, we gladly close the books on 2022. Equity and bond benchmark indexes posted deeply negative returns this past year, a double dose of disappointment unmatched over the past 50 years. While not unusual for equities to routinely post difficult years, the bond market inked its second year in a row of negative returns, a feat not seen since 1958-59. Ironically, U.S. bonds have never posted three consecutive years of negative returns, setting up for what we believe will be an exciting 2023 as interest rates peak-and one we have already begun positioning for within our current guidance.  [Read more]


Paying America’s Bills

by Wells Fargo Investment Institute

At over $30 trillion, the federal debt is staggering but currently manageable. What’s troubling is the prospect for its continued growth over the long term. We believe the Treasury has done a good job of managing the debt expense, and investors have shown no reservations about buying Treasury securities. Lower rates over the past decade helped keep funding costs low, but if rates rise further and current spending trends continue, that could change. Although it’s unlikely that investors will feel the most damaging effects of America’s fiscal challenges anytime soon, Wells Fargo Investment Institute is already factoring the potential impact into our strategic models and recommending portfolio changes for investors to consider.  [Read more]


Equities: Inflation is Still a Market Risk

by Chao Ma, PhD, CFA, FRM | Global Portfolio and Investment Strategist of Wells Fargo Investment Institute

Hot and sticky inflation readings may mean the continuation of tightening monetary policies, potential future earnings deterioration, and bearish market trends. We prefer to hedge the negative impact from higher interest rates, economic downturns, and high inflation by focusing on domestic, high-quality, and defensive segments of the equity markets.  [Read more]


Alternatives Spotlight: Adding Alternatives to Reduce Portfolio Drag

by Justin Lenarcic | Lead Wealth Management Solutions Analyst of Wells Fargo Investment Institute

We believe alternative investments may be uniquely positioned to help portfolios regain lost returns, or altitude. We favor Global Macro and Relative Value strategies as a way to help potentially mitigate the drag of higher inflation and interest rates. As we get closer to recession, we will shift focus to certain Private Capital and Hedge Fund strategies that can potentially benefit from a recovery in the economy and asset prices.  [Read more]


What’s Next For Inflation, and Investment Implications

by Global Investment Strategy Team | Wells Fargo Investment Institute

The recent decline in commodity prices may produce a sudden drop in headline inflation in the coming months, but other components are likely to keep inflation higher for longer. The Federal Reserve (Fed) is unlikely to pivot to an accommodative policy until inflation returns to somewhere between 2% and 3%. Policy seems set to reduce economic growth until demand roughly matches supply.  [Read more]


An Elusive Inflation Peak Weighs On Equity Markets

by Paul Christopher, CFA | Head of Global Market Strategy of Wells Fargo Investment Institute

The U.S. Labor Department’s May Consumer Price Index report, released on June 10, showed that inflation remains high, and in some areas is actually continuing to accelerate. Equity and bond markets broadly sold off ahead of this week’s Federal Reserve (Fed) policy meeting. There is no recession yet in the U.S. economy, but the inflation news only reinforces our view that a mild recession is likely to occur, beginning late in 2022 and extending into 2023.  [Read more]


Fixed Income Spotlight: Quantitative Tightening and What It Means For Markets

by Peter Wilson | Global Fixed Income Strategist of Wells Fargo Investment Institute

The Federal Reserve’s plans to reduce its securities portfolio mean that its swollen balance sheet could be down to its pre-COVID-19 size in two to three years. Quantitative tightening may add to upward pressure on real yields. Along with other forms of tightening in financial conditions, this represents a further headwind for risk assets.  [Read more]


Asset Allocation Spotlight: Remaining Disciplined Amid Market Uncertainties

by Veronica Willis | Investment Strategy Analyst of Wells Fargo Investment Institute

Economic uncertainty and market volatility may have left investors unsure of how, where, and when to put cash to work in their portfolios. Completely exiting the market can have a drastically negative impact. We recommend investors stay patient, remain invested, and, if appropriate, use dips as buying opportunities to return to targeted levels.  [Read more]


What Risks Can Investors Expect in a Rising-Rate Environment?

by Wells Fargo Investment Institute

Meaningful increases in longer-term rates occurred in 2013 and late 2016, but that is a distant memory for many investors. The last short-term rate hike cycle began in late 2015 as the Fed raised rates on a slow and steady schedule. With inflation well above Fed targets there is the potential of heightened rate volatility. The purpose of this report is to help investors anticipate risks to their portfolios if interest rates (short-term or long-term) rise.  [Read more]


Equities: Anatomy of Stock Market Corrections

by Chris Haverland, CFA | Global Equity Strategist of Wells Fargo Investment Institute

Stock market pullbacks are normal occurrences with the S&P 500 Index correcting (at least a 10% decline) on average once per year since 1928. Although the lows may not be in place yet and volatility likely will remain elevated in the near term, we would advise investors to take advantage of weakness by adding to high-quality U.S. Large and Mid Cap Equities.  [Read more]


Fixed Income Spotlight: The Federal Reserve in 2022

by Luis Alvarado | Investment Strategy Analyst of Wells Fargo Investment Institute

The Federal Reserve (Fed) will continue to play a key role in the global economy as it wrangles to tighten financial conditions and sustain the U.S. recovery. Our base case, for now, is that the Fed will only increase the federal funds target rate once in 2022 and, most likely, after it has finished purchasing assets.  [Read more]


Managing Portfolios Before Inflation Peaks

by Paul Christopher, CFA | Head of Global Market Strategy of Wells Fargo Investment Institute

We believe inflation will moderate in 2022, but we expect the path to lower inflation to begin with higher inflation in the front half of the year. The stickier drivers of inflation are likely to persist, but our base case is that they will not outweigh the improvement we expect in the transitory elements. What it may mean for investors: As long as the economy remains strong, the asset classes that we expect to outperform are those factors that drive both the economy and inflation. Our guidance aligns with favoring those sectors that we expect to outperform—and to avoid those that we expect to underperform—as inflation rises.  [Read more]

INVESTMENT STRATEGY | October 11, 2021

Equities Spotlight: Review of Stock Market Corrections and Rebounds

by Doug Beath | Global Investment Strategist of Wells Fargo Investment Institute

Stock market volatility has re-emerged and we expect this trend to continue. Absent a recession or excessive valuation, history suggests that equity-market downturns rebound relatively quickly, providing investors with an opportunity to rebalance portfolios.  [Read more]


The Perils of Trying to Time Volatile Markets

by Global Asset Allocation Strategy Team | Wells Fargo Investment Institute

Missing a handful of the best days in the market over long time periods can drastically reduce the average annual return an investor could gain just by holding on to their equity investments during sell-offs. While missing the worst days can potentially offer higher returns than a “buy and hold” strategy, disentangling the best and worst days can be difficult, since they often occur in a very tight time frame—sometimes even on consecutive trading days.  [Read more]