Sevens Report Quarterly Letter

Better Communication. Stronger Client Relationships.

More Time for Your Business and Family.  

The 7% pullback this past quarter reminded clients and investors that volatility still exists in this market, and now as we start the 3rd quarter of 2019, markets are facing the most amount of uncertainty since the 4th quarter of 2018.  

Over the past three months, we’ve seen:

  • A breakdown in U.S./China trade talks 
  • Suddenly disappointing U.S. and global economic data
  • A partially inverted yield curve
  • Fed policy uncertainty (will they cut, or won’t they?)

So, despite the still solid gains for 2019, the bottom line is that risks to this rally (and the broader recovery) grew in the second quarter, and if your clients and prospects are like the investors I talk to on a regular basis, they are worried the bull market could end.

In times like these, a personal touch to clients and prospects can go a long way to settling nerves and reminding them they have a sound financial plan that’s designed to weather bouts of volatility.

A timely quarterly letter is one of the most widely used, and easiest ways to accomplish this personal “touch,” and we’ve found a way for today’s advisors to deliver that timely, high quality quarterly letter with virtually no work.


You let us write it for you.

On average, the advisors we spoke to said they spent between four and six hours researching, writing, editing and proofing their quarterly letter.

If you’re as busy as most of the advisors I know, that’s way too much time and stress to devote to a Quarterly Letter, especially in a market as volatile as this one.

And, that’s why, at the beginning of 2018, we produced the first Sevens Report Quarterly Letter.

And, on Monday, July 1st we will be sending our Quarterly Letter for Q2 of 2019 to paid subscribers – so they can have their letter sent (or ready to be sent) within the first few trading days of the third quarter of 2019 – and in doing so, show their clients they are on top of markets, regardless of the calendar.

We write a quarterly letter in the voice of an advisor, directed towards clients (and prospects), that our subscribers can edit and send along as their own.

That means you can:

1. Use it “as is.” Meaning, put it on your letterhead, sign it, and ship it right out the door.

2. Edit it as you see fit (use parts of the content in conjunction with your own takes).

3. Send it to anyone you like (clients, prospects, family and friends).

And, since we send you the content, it can be approved by compliance because it’s coming from YOU.

We have hundreds or financial advisors that subscriber to our quarterly letter (from major, national brokerage firms and smaller RIAs) and almost all of them get the letters through compliance.

Sevens Report Quarterly Letter will contain:

  • A macro “look back” at the most recent quarter that will explain what factors drove the market’s performance.
  • Important performance data for major asset classes and various indexes.
  • A look ahead at the coming quarter including general analysis of risks and opportunities (but, no predictions).
  • And, like the Sevens Report, it’ll be well-written, simplified, and brief.

Essentially, we will pen a quarterly letter that you can stamp your firm logo, firm name, contact information, and signature on. (As mentioned, you can edit however you like, too.).

But, we can only explain the letter so much. So, we’ve included our Q1'2019 Sevens Report Quarterly letter that was sent to paid subscribers three months ago, so you can see exactly what the product looks and feels like:

Quarterly Insights – April 2019

Optional Title #1: An Impressive Rebound to Start the Year

Optional Title #2: Improvement in Trade and Earnings Power Stocks Higher in Q1

Optional Title #3: The Best Start to the Year Since 2009

Optional Title #4: A Strong Start to the Year, But Risks Remain


Dear Client,

Second Quarter Market Outlook

The outlook for markets has improved since the depths of the correction in the fourth quarter. The Fed has backed off additional interest rate increases, corporate earnings have exceeded conservative expectations, and U.S.-China trade relations appear to be moving in the right direction.

And, those positives have rightly resulted in a strong start to the year. Yet, despite the strong gains this past quarter we think it would be a mistake to become complacent in this market.

The problems that contributed to the volatility in the fourth quarter of 2018 were three-fold: Disappointing economic growth, underwhelming earnings results and confusion regarding the outlook for future Fed policy. While there has been improvement on two of those three fronts, none have been fully resolved. And, there are still legitimate concerns about the pace of economic growth globally following the disappointing economic readings of the last three months.

Additionally, while it is largely expected that the U.S. and China will sign a new trade deal that will result in tariff reduction, as of this writing, that has not occurred. And as the past two years have taught us, this administration’s approach is an unorthodox one and anything can happen.

Looking forward to the second quarter, we will be searching for signs that global economic growth has stabilized and inflected higher. Additionally, we’ll seek out further clarity on the Fed’s plans for interest rates. Meanwhile, this upcoming earnings season, which begins in two weeks, will also be important as corporate earnings results and commentary need to reinforce and confirm the optimistic economic and corporate views currently reflected in the stock market. Finally, regarding trade, we’ll review and analyze any trade deal to see if it is the economic positive investors believe it will be.

So, we start this second quarter of 2019 thankful for the strong start to the year, but also mindful that now is not a time to become complacent – because risks to investors’ portfolios remain. 

And, as always, we are committed to helping you navigate this challenging investment environment. 

Even if volatility returns, history has shown that a long-term approach combined with a well-designed and well-executed investment strategy can overcome periods of heightened volatility, market corrections, and even bear markets.

At John Doe Advisors, we understand the risks facing both the markets and the economy, and we are committed to helping you effectively navigate this challenging investment environment. Successful investing is a marathon, not a sprint, and even the ups and downs in the markets we have all experienced in the last six months are unlikely to alter a diversified approach set up to meet your long-term investment goals.  

Therefore, it’s critical for you to stay invested, remain patient, and stick to the plan. We’ve worked with you to establish a personal allocation target based on your financial position, risk tolerance, and investment timeline. Therefore, we aim to take a diversified and disciplined approach with a clear focus on longer-term goals.

We understand that volatility can be both unnerving and stressful, and we thank you for your ongoing confidence and trust. Rest assured that our entire team will remain dedicated to helping you successfully navigate this market environment.

Please do not hesitate to contact us with any questions, comments, or to schedule a portfolio review.



John Doe

John Doe Advisors

1 Orange Street

Miami, FL 11111

(123) 123-1234

Look, I know some of you are not writing a quarterly letter at all.

If you’re in this camp, I’m worried you’re making a colossal mistake. Potentially, you’re leaving yourself exposed to losing clients to advisors who communicate effectively!

Whether you use our service or not, please consider writing one this year (remember the survey responses above).

The rest of you are probably doing it, but begrudgingly.

It could take a day, a few days or even a week or more to fine-tune and write this type of commentary.

Plus, you may be circulating it around the office for input and re-working it further after that. Your compliance department will probably want to inspect it, too!

To top it off, you might still be unsure if it’s any good.

And the ultimate kick in the teeth is fearing what your clients think upon reading it.

No one likes this process, and that’s why we provide:

  • A high-quality letter. With strengthening the client relationship as the main goal, it will be written in a clear, concise and plain English format (similar to how we write the Sevens Report and Sevens Report Alpha).
  • A timely letter. Sevens Report Quarterly Letter will be delivered to paid subscribers on Monday, July 1st.
  • A turnkey solution. You can literally put your firm name, address, and logo on it, sign it, convert it to a PDF, and let it fly. Naturally, if you want to make any edits to it, feel free. That’s perfectly okay.

“I really like this. I’m so glad I can lock this in and not have to worry about doing this in the future.”

W.V. UBS Advisor

“I love this.”

B.C. Stifel Advisor


“I'll give this a try. I value my time at $1000/hr. If this saves me ten can do the math.”

J.R. Raymond James Advisor

If you’re ready to let us help you 1) Strengthen client communication and 2) Save time by writing your quarterly letter for you, simply click this link to start your subscription.  

Quality Research at a Compelling Value

Six years ago, I started the Sevens Report with the ultimate goal of becoming the total research solution for today’s financial advisors by providing high-quality research solutions at reasonable costs.

In doing market research, we could only find one other firm that was writing quarterly letter commentary for advisors. The problem was you could only get it as part of a bundle of other products and the cost was $5,000/year!

I know for a fact that some advisors who use this particular group offered to pay $2,500 per year for the quarterly commentaries, separately. But, this firm hasn’t obliged.

Frankly, I think either of those amounts is outrageous.

So, I’m undercutting the competition on cost by 80% per quarter. Or by 82%, annually.

Now, that’s a serious discount.

A Sevens Report Quarterly Letter subscription will cost $250/quarter (cancel any time, but no refunds on the current quarter’s letter) or $915 if you pay annually.

The way we see it, if we help you retain just one client or grab one additional allocation through sending these quarterly letters to clients, it will more than cover the cost!

I see this as a win-win because we use our strength (writing about the markets) to help you:

  • Save time (small survey of advisors averaged 6-10 hours working on their quarterly letters)
  • Show you’re on top of markets with impressive market analysis
  • Improve communication with clients and prospects
  • Strengthen relationships
  • Win additional assets from existing clients or prospects

And the best part is, it will be coming directly from you.

It will allow you to spend more time doing what you do best and doing what you want.

Begin your subscription to the Sevens Report Quarterly Letter right now by clicking the button below and get redirected to our secure order form.

Finally, everything in business is a trade-off between capital and returns.

So, if you commit to an annual subscription, you get one month free, a savings of $85 dollars. To sign up for an annual subscription, simply click here.


Tom Essaye


Sevens Report

Let Us Do The Work 

Stocks rebounded strongly in the first quarter thanks to a combination of improving U.S.-China trade relations, the Federal Reserve halting interest rate increases, and a better outlook for corporate earnings. The S&P 500 finished the first quarter of 2019 with the best quarterly return since 2009.

Starting with U.S.-China trade negotiations, significant progress was made towards a new deal over the past three months, highlighted by the removal of the March 1st trade deal deadline imposed by the administration back in late November. Most of that progress occurred in January and that was one of the initial catalysts for the first quarter rally in stocks.

Turning to the Fed, perhaps the most impactful event of Q1 was the Fed meeting that took place on January 29th and 30th when the Federal Open Market Committee opted to hold interest rates steady, but also stated that it would be “patient” regarding further rate increases. This shift, which according to the Fed was in response to global economic uncertainty, helped extend the markets’ gains from early January. The expected “pause” in rate hikes was later confirmed by the Fed at the March meeting as official projections for interest rates (known as the “dot plot”) showed no more rate hikes are expected in 2019. The Fed keeping interest rates steady should relieve pressure on the economy, and we have already seen some positive effects of that move via a decline in mortgage rates and a rebound in housing sales in the first quarter.

Finally, on a corporate level, earnings results were better than feared in the fourth quarter of 2018. We can see that most clearly in the market reactions to companies that posted disappointing earnings results. According to the research firm FactSet, S&P 500 companies saw the best stock price reaction to negative earnings per share surprises in nine years. Companies that missed analysts’ earnings expectations, on average, fell just 0.40% during the most recent reporting period, compared to an average 2.6% decline over the past five years. Additionally, more than 70% of S&P 500 companies reported earnings that beat estimates, while over 60% of companies reported stronger than expected revenues. Put plainly, an elevated number of bad earnings results were expected by the markets, and the lack of a continued decline in stocks with disappointing earnings implies the results were not as bad as feared.

However, while there was clearly more good news than bad during the first quarter, it would be a mistake to think that the economic “coast is clear.” As such, we think it would be premature to expect the second quarter to produce returns similar to the first quarter (as we all know, past performance is not indicative of future results).

While there was real improvement in U.S.-China trade negotiations, Fed policy outlook and earnings expectations, economic data in the first quarter was disappointing and continued to show a loss of positive momentum not just in the United States, but globally. The current estimate for first quarter GDP is 1.7%, well below the 2.2% growth in the fourth quarter. Internationally, European and Chinese manufacturing data showed outright contraction in activity in Q1, while continued Brexit uncertainty is acting as a headwind on the British economy.  

Finally, many parts of the yield curve have inverted, meaning Treasury yields are higher on short term debt compared to longer dated maturities. In the past, that dynamic has sometimes preceded slower economic growth and lower inflation, neither of which are positive for stocks.

In sum, the market’s performance during the first quarter was a welcomed sight following the volatility and un-nerving declines in the fourth quarter of 2018. And, we are pleased to say there has been real improvement in the macro-economic outlook for markets, for the reasons listed above.


But while the outlook for markets has improved, notable risks remain. We continue to expect, and are prepared for, more volatility within the context of a still on-going, multiyear bull market.

1st Quarter Performance Review – A Solid Rebound to Start the Year

The major U.S. stock indices registered their best quarterly performance in a decade in Q1’19, thanks in part to less restrictive Fed policy and positive progress on the U.S.-China trade conflict. As a result, investors saw broad gains across most market segments and sectors as U.S. stocks logged the best quarterly performance since 2009.

By market capitalization, small caps outperformed large caps, which is a reversal of from the fourth quarter. The reduction in global trade tensions, combined with the Federal Reserve signaling no more interest rate increases in 2019, helped small caps to outperform large caps. From an investment style standpoint, growth outperformed value mostly due to strong tech sector returns in Q1, which is also a reversal from the fourth quarter.

On a sector level, all 11 S&P 500 Index sectors finished the first quarter with positive returns however tech and real estate sectors were the notable outperformers. Tech was driven higher by improvement in the trade outlook, while the real estate sector benefitted from a decline in mortgage and interest rates following the Fed’s January and March meetings.

On the contrary, historically defensive sectors underperformed in the first quarter but still finished with positive returns. Consumer staples, healthcare and financials lagged the S&P 500 as investors rotated to more growth-oriented sectors during the previous three months.

Looking internationally, foreign markets also had a strong start to 2019, but as has been the case frequently over the past year, foreign markets again underperformed U.S. markets, in part because economic readings from Europe showed the EU economy was clearly losing momentum. However, despite that disconcerting European economic data, foreign developed markets outperformed emerging markets, due in part to the lack of an official trade deal between the U.S. and China by quarter’s end, along with a stronger U.S. dollar, which is traditionally a headwind on emerging markets. Foreign developed markets were aided by the European Central Bank announcing in March it would re-start a stimulus program to help the EU economy.

Commodities saw strong returns in the first quarter, thanks mostly to a surge in oil prices. Oil rose sharply over the past three months primarily because of supply issues, including the uncertain nature of Iranian sanction waivers, new Venezuelan sanctions that reduced U.S. imports, and a pledge by OPEC to extend previously announced production cuts for all of 2019. Those supply risks offset demand concerns related to disappointing global economic growth. Gold, meanwhile, logged only modest gains for the first quarter thanks to headwinds from a stronger U.S. dollar and lack of acceleration in inflation.  

Switching to the fixed income markets, the leading benchmark for bonds (Bloomberg Barclays US Aggregate Bond Index) saw positive returns during the first quarter, but bond indices lagged stocks, which is a reversal from the fourth quarter of 2018.

Looking deeper into the fixed income markets, longer-duration bonds outperformed those with shorter-durations during Q1, which is a continuation of what we observed in the fourth quarter of 2018. And, given the Fed’s pledge not to raise rates any more in 2019, the outperformance of long duration bonds was expected.

Corporate bonds, both investment grade and high yield, handily outperformed government bonds in the first quarter thanks to a better than expected earnings season, a reduction in macro risks via the apparent U.S.-China trade progress, and the Fed “pause” on interest rate hikes. Both investment grade and high yield bond funds had their best quarterly returns in years.