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Meet Albion’s New COO

SALT LAKE CITY, March 16, 2021 /PRNewswire/ — Albion Financial Group announced today that Mason Woolf has been named Chief Operating Officer of the firm. In a clear sign of Albion’s growth and progress, the COO role has been created to oversee all company policies, processes, day-to-day management, coordination across teams, and organizational planning — with a particular focus on keeping the firm’s operations on track. Additionally, the COO works closely with our CEO to implement tactical as well as larger strategic goals in effort to facilitate improvements across all of Albion’s functional areas.

“For nearly a decade and a half Mason has been an essential member of the Albion Team, and over the last several years has served to integrate and improve several of our core functional groups. Naming Mason COO both recognizes the esteem his peers have for him and formalizes the critical work he already performs,” said John Bird, President and CEO of Albion.

Since joining the firm in 2006 Woolf has served on Albion’s Investment Team, and for the last decade has been Director of Trading. Mr. Woolf also serves as Chief Compliance Officer, safeguarding the firm’s fiduciary integrity. He has recently joined Albion’s Board of Directors and assists with setting the long-term vision of the organization.

“Four decades ago nearly everyone in the industry thought Albion was crazy for choosing a business model that placed client interests above all else. Now, every money manager in the world is pursuing our model. Having witnessed the power of Albion’s fee-only fiduciary approach during my past 15 years as a member of this team I am thrilled to have the opportunity to serve as Chief Operating Officer. This role has long been a goal of mine, and I greatly appreciate both the support and trust placed in me by our team as we forge this path together. Albion has an incredibly bright future and we look forward to the next 40 years of guiding our clients through a lifetime of good financial decisions.”

A 25-year veteran of the industry, Woolf spent his early career with Dean Witter, Arlington Value Management, and Fidelity Investments. Woolf holds a Master of Business Administration from the Gore School of Business and a Bachelor of Science in Finance from Westminster College. He is also an honored inductee of Utah Business Magazine’s prestigious Forty Under 40, a select group of executives and business leaders to watch (2020).

About Albion Financial Group

Albion Financial Group was founded in 1982 in Alta, Utah by Toby Levitt and John Bird. The firm was an early pioneer of fee-only fiduciary investment and financial advising – providing world-class financial planning and investment management services while working to eliminate the conflict of interests prevalent in the industry. The team of 28 professionals provide service to individuals, families and closely held businesses with a geographic reach that extends from Utah’s Wasatch Front to states and locales across the nation.

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Weekly Market Recap

Weekly Market Recap – 20210312Download

Equity markets rallied last week, particularly after Wednesday’s release of consumer price inflation (CPI) data that was slightly below consensus estimates. The S&P 500 and the Dow both finished the week at fresh all-time highs, while the Nasdaq remains ~5% below its mid-February record. Small and midcap stocks continued their run of dominant performance, extending their YTD lead over large caps. International indices also finished higher.

Rates drifted lower for much of the week before abruptly moving higher on Friday. In the end, 10-year yields rose 5bp on the week to 1.62%, the highest close since February 12, 2020. 30-year yields rose 8bp to 2.38%, the highest level since late 2019. Investment grade credits spreads where largely unchanged while high yield spreads tightened, resulting in moderate price declines for high quality corporates while riskier bonds were close to flat.

Oil prices fell early in the week and then rallied; the US dollar did the reverse.

In an encouraging sign for the labor market, weekly jobless claims (new and continuing) reached their lowest levels of the pandemic in data released on Thursday. See the Chart of the Week for a time series.

Finally, in a Thursday night address to the nation, President Joe Biden announced that he would direct all US states to make vaccines available to any adult that wants one by no later than May 1st.

Weekly Market Recap – 20210312Download
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Weekly Market Recap

Weeky Market Recap (FINAL) – 20210305Download

Equity markets were mixed last week, with significant dispersion across sectors. Cyclicals performed well, including energy (+10.1%), financials (+4.4%), industrials (+3.1%), and basic materials (+2.5%). Conversely, large cap technology stocks continued to struggle as they have for much of 2021, pulling the Nasdaq into the red for the week. Meanwhile, midcap stocks were higher while small caps were lower, narrowing the 2021 performance gap between the two. International stocks were mixed as well.

The selloff in Treasuries continued unabated last week: 10y yields rose 17bp, while 30y yields were up 15bp. Credit spreads, which began 2021 already on the tight side of historical averages, have been unable to compress enough to offset the move in rates, leading to price declines in corporate bonds across the credit spectrum. The only part of the bond market that remains in positive YTD total return territory is high yield (aka, sub-investment grade), owing to its shorter duration and lower exposure to Treasury yields.

Oil lurched higher last week after OPEC+ surprised the market by extending output cuts into April. Meanwhile the US dollar surged to its highest level since late November, relative to a basket of international currencies.

Friday’s jobs report was encouraging, as nonfarm payrolls (+379k) increased sequentially for the second consecutive month after falling into negative territory in December. See the Chart of the Week for a time series.

Weeky Market Recap (FINAL) – 20210305Download
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Weekly Market Recap

Weeky Market Recap 20210226Download

Last week’s market action was dominated by interest rates. Treasury yields rose throughout February, at an accelerating pace that peaked on Thursday as 10-year yields briefly exceeded 1.6% intraday. The trend finally broke on Friday, with 10-year yields pulling back to around 1.4%, but interest rate volatility remains high. The CBOE Interest Rate Volatility Index (which measures implied volatility on interest rate swaptions) closed the week just shy of 78, the highest level in the past 3+ years outside of a few days in March of 2020. See the Chart of the Week for details.

The high levels of interest rate volatility are being driven by inflation concerns and questions about the forward path of Fed policy. These concerns were a headwind for stocks last week, particularly longer duration equities like large cap tech and emerging markets. Nearly all sectors in the S&P 500 finished the week lower, the lone exception being energy stocks which continued to perform well thanks to rising oil prices.

Economic news last week was positive (perhaps too much so for rates markets). The Conference Board’s Leading Economic Index and its Consumer Confidence Index both registered sequential gains, while initial and continuing jobless claims both came in lower than expected. And there was more good news on the virus front, as the FDA issued an emergency use authorization for Johnson & Johnson’s single-shot vaccine.

Albion’s “Four Pillars”:

*Economy & Earnings – The New York Fed’s Weekly Economic Index estimates real-time GDP growth to be -3.3% y/y. Growth is expected to be modest early in 2021, and pick up in the second half of the year.

*Equity Valuation – at 22x forward earnings the S&P is certainly not cheap, and long-term valuation metrics like CAPE (cyclically adjusted P/E ratio) suggest that compound annual returns over the coming decade are likely to be in the single digits. That said, lower equity returns may be justified in the context of ultra-low yields on alternatives like bonds and cash.

*Interest Rates – Rates remain low by historical standards despite recent volatility, supporting equity valuations and lowering borrowing costs.

*Inflation – After staving off deflation early in the pandemic, the Fed has communicated tolerance for short periods of above-target inflation. A cyclical bump in inflation may occur in 2021 as pent-up demand is released, testing the Fed’s resolve, but we do not expect higher inflation to persist.

Weeky Market Recap 20210226Download
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ESG with WOA on Zoom

We welcome you and a guest to join the Women of Albion THIS THURSDAY, February 25th, for a virtual event on ESG investing. ESG stands for Environmental, Social, Governance, and the term ESG investing includes these three central factors along with the usual financial factors in determining the investment merit of a company.
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Albion has provided ESG investing opportunities to our clients since 2017 and as this type of investing gains more popularity and recognition, we are getting many questions about what ESG investing is and how it works. Thus came the inspiration for our spring #WOA event!
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Albion’s Chief Investment Officer, Jason Ware, will join the Women of Albion to talk about ESG investing. This will be an opportunity to learn more about the type of companies that make the cut, why ESG investing is important to Albion, and how it can be a way to align your investments with your values.
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Looking forward to seeing you on Zoom! Contact us to RSVP.
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#esg #esginvesting #womenofalbion #albionfinancialgroup #womeninfinance #femalefinancialliteracy #environmentalinvesting

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Weekly Market Recap

Weeky-Market-Recap-FINAL-20210219Download

US equities were mixed last week. Large cap cyclicals rose, including energy, financials, materials, and industrials, pushing the Dow to a record high during Wednesday’s session. However, sectors like technology, communications, and healthcare finished lower, resulting in small losses for the S&P 500 and Nasdaq Composite. Small and midcap US stocks were also down slightly, while international stock indices managed to eke out small gains.

Last week’s most prominent market action was in rates, as Treasury yields moved higher on the back of PPI inflation and retail sales figures that blew past consensus estimates. The 10-year finished the week at 1.34% (+13bp w/w), while the 30-year closed at 2.13% (+12bp w/w). Credit spreads compressed slightly, particularly in high yield, but not enough to prevent price declines across most spread-oriented sectors of the bond market.

Oil finally took a pause, finishing slightly lower on Friday after trading above $60/barrel (WTI) for most of the week. Market participants are anticipating a rise in OPEC+ production, and a short-term drop in demand as refineries take time to recover from freezing weather across much of the southern US.

In other economic news, weekly jobless claims remained range-bound, while residential building permits rose to a fresh 15-year high of 1.88 million (SAAR), a positive sign for housing and the broader economy in 2021. See the Chart of the Week for a time series.

Weeky-Market-Recap-FINAL-20210219Download
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Weekly Market Recap

Weeky-Market-Recap-FINAL-20210212Download

Equity markets around the world rallied once again last week, driven by continued strength in earnings, notable progress on vaccine distribution, dovish commentary by Fed Chairman Jerome Powell, and some progress towards another round of economic stimulus in the US.

On the vaccine front, Sinovac Biotech announced that its vaccine was approved for use in China, Pfizer’s vaccine was approved for use in Japan, and the Biden administration announced that the US had reached deals with both Pfizer and Moderna for another 100 million vaccine doses from each company. Dr. Anthony Fauci now expects that any American who wants a vaccine will be able to get one in the spring (possibly as early as April).

Treasury markets responded to all of this good news by sending yields higher, with the 30-year breaching 2% for the first time since Feb 19th of last year (the same day equity markets reached their pre-pandemic peak). Meanwhile the 2s10s curve reached 110 basis points, the highest level since the pandemic began. Investment grade corporate credit spreads tightened by 2bp, not enough to offset the move in rates. Muni and high yield bond spreads tightened more vigorously, pushing prices higher in those markets.

Oil extended its 2021 rally, with WTI finishing the week up another 4.6%. As a result, the energy sector extended its lead as the best-performing sector so far in 2021, while utilities were the worst performer last week.

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#4 in the Book of Lists and #1 in our Clients’ Hearts

We are honored, once again, to be listed among Utah’s top Registered Investment Advisors in Utah Business Magazine’s 2020 Book of Lists publication.

Albion Financial Group has been ranked on these lists on numerous occasions and we are grateful for the recognition of our dedication to our clients. Additionally, several individuals from our team have been recognized for their excellence on the magazine’s popular 40 UNDER 40 and Premier Advisors lists.

As Albion now approaches our fortieth year in business, we are proud of our pioneering fiduciary legacy and the life-long guidance we provide to the individuals and families within our client community.

Read our story to learn more about Albion Financial Group.

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Weekly Market Recap

Every Monday morning, download our Weekly Market Recap for Commentary and Data, with Economy and Earnings, Equity Valuation, Interest Rates, and Inflation, including infographic charts.

Weeky-Market-Recap-20210205Download

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FAQ: Bitcoin 101

Bitcoin, and more broadly cryptocurrencies, are seeing increasing news coverage. This has left many wondering: “What is bitcoin and how does it work?” For those trying to better understand bitcoin and cryptocurrencies, here’s our understanding on a handful of frequently asked questions:

What is bitcoin?

Bitcoin is a digital “currency” that can be used to purchase goods and services (only at select locations, for now), or held as a store of speculative value. There are many differences between bitcoin and traditional currency, but the principal difference is that bitcoin is not issued by a government or regulated by a government entity.

Where did bitcoin come from?

This is where it gets a bit mysterious. Bitcoin was created by “Satoshi Nakamoto”, an unknown individual or group of individuals. Under this pseudonym a white paper was circulated in 2008 that first described the concept for a transparent, visible peer-to-peer payment system authenticated by a vast network that does not require the presence of a third party middleman – such as banks or other financial institutions. By combining cryptography and unique software protocols, Satoshi Nakamoto originated a payment system that allowed participants to transact directly with one another.

How is it possible to make currency transactions without banks?

Bitcoin transactions have been made possible with the encryption technology underpinning cryptocurrencies known as “blockchain.” Blockchain is a global Internet-wide distributed network that is at its core a decentralized accounting ledger recording every bitcoin transaction. The blockchain ledger is shared by way of an extensive network and the information therein is validated by network “miners” every ten minutes by solving mathematical puzzles using very fast computers and high amounts of electricity. This network validated ledger is crucial as it ascribes proof of ownership to digital assets like bitcoin. If the ledger proves ownership, participants can have trust when making transactions.

Tying together the concept of bitcoin and blockchain, think of it this way – the bitcoin “coins” themselves are simply seats within the aforementioned blockchain ledger. Anyone can buy into or sell out of this ledger at any time – with no prior consent, and with little-to-no fees. Therefore, when buying a bitcoin you are essentially acquiring one of a number of fixed slots within this ledger. You leave the ledger by selling your bitcoin to someone else who wishes to buy in.

If I want to buy bitcoin, how would I make a purchase? Do I need to buy a whole coin?

There are many exchanges out there that allow participants to deposit US dollars (or other widely accepted global currencies) directly from traditional bank accounts in exchange for bitcoin. Some cryptocurrency exchanges also have mobile apps allowing participants to buy bitcoin anytime, anywhere.

Additionally, participants need not buy a whole bitcoin to participate. The smallest unit of bitcoin, a “satoshi”, is the size of one hundred millionth of a single bitcoin (0.00000001 BTC).

What are the risks to purchasing and holding bitcoin? The current price seems high!

It depends on the type of risk one is referring to. Let’s start with general cybersecurity threats. Cryptocurrency exchanges, including those which trade bitcoin, have been hacked before, and will likely be hacked again. Perhaps the most notable example was in 2014 when “Mt. Gox”, the largest bitcoin exchange at the time, failed as a direct result of hackers and vast bitcoin theft. Security surrounding cryptocurrency exchanges have notably improved since Mt. Gox’s failure. Individuals can use bitcoin digital wallets and vaults that are encrypted with a secure network key which dramatically reduces the possibility of being hacked.

Another key risk worth touching on is the possibility of loss of capital for those speculating on its price. Bitcoin has experienced a monumental run as of late. There are a variety of opinions and market variables as to why this has occurred. Will this price rally continue, or crash? Nobody knows for sure. However one way to think about it is, by design, bitcoin was given a finite supply – determined at inception to be 21,000,000 bitcoins – and we are now seeing growing awareness leading to rising demand. This basic supply / demand dynamic may help describe, at least at some level, recent price moves in bitcoin. That being said, just because more cryptocurrency enthusiasts are now entering the market seemingly pushing up prices does not mean everyone should take a position. With a greater understanding of bitcoin – both its potential opportunities and risks – paired with careful holistic wealth advice, more educated decision making can be made on potential bitcoin / cryptocurrency participation.

We hope that this FAQ provides a helpful introduction to bitcoin / cryptocurrencies, and perhaps even sparks your desire to want to learn more. The investment team at Albion Financial Group is well versed in bitcoin / cryptocurrencies and blockchain technology. Please reach out to us at 801-487-3700 or info@albionfinancial.com if we can answer your bitcoin, investment, or financial planning questions.

Disclaimer: Information provided is for educational purposes only. This is not a recommendation to buy or sell any security or cryptocurrency. There are significant risks associated with cryptocurrency that are unique and must not be taken lightly. It is critical that you perform your own due diligence prior to engaging in any buy or sell transaction. The value of bitcoin, or any cryptocurrency can, and may, ultimately go to zero.