Sevens Report Quarterly Letter

Better Communication. Stronger Client Relationships.

More Time for Your Business and Family.  

Rising Recession Risks

Trade War Getting Worse

Yield Curve Inverts for the First Time In 10+ years

Liquidity Concerns via A Repo Market Squeeze

These are the headlines that investors (and advisors) were confronted within the 3rd quarter, and they are scary because we haven’t seen headlines like this since the financial crisis.

Now, to be clear, nothing in today’s market resembles the financial crisis, but I have definitely experienced an uptick in nervousness from the investors I talk to over the past three months.

Positively, the market has remained resilient and barring any major surprises in the last few days of the quarter, the S&P 500 should register a slightly positive return.

But, it’s undeniable that the headwinds facing stocks and the global economy grew stronger in the third quarter, and the chances of continued volatility during the last three months of the year are pretty high!

And, because of this setup, I think now is a critical time to communicate with clients, and here’s why:

One of the biggest complaints I hear about advisors from clients is that they only hear from their advisor when the market goes down or gets volatile (basically when the advisor is scared the client might go to cash or leave).

Well, now is an opportunity for advisors to be proactive – to get ahead of potential volatility in the coming months and, in doing so, demonstrate to that client that you’re not surprised by market volatility and that you’re in control of their portfolio.

That’s what increases retention and referrals.  

One of the easiest (and most effective) ways to communicate consistently with clients is to send a quarterly letter – one that is brief (no one likes to read a lot) but that demonstrates you understand what’s happening in the markets and have a plan to protect and grow their portfolios.

But, writing a quarterly letter isn’t easy, especially in times like these when we have multiple influences creating volatility, such as:

  • The U.S./China trade war
  • Rising recession risks
  • Uncertain Fed policy
  • Liquidity concerns

Explaining all these different market influences to clients in a way that reassures them is difficult, and it’s the biggest reason we hear advisors don’t send their own quarterly letters (instead they send something generic from the firm’s CIO).

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.

But we’ve found a better way to produce a value-add, impressive quarterly letter without investing precious hours of work.

You let us write it for you.

At the beginning of 2018, we produced the first Sevens Report Quarterly Letter.

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

That means you can:

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

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

• 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.

On Tuesday, October 1, we will be sending our Quarterly Letter for Q3 2019 to paid-subscribers so they can have their letter sent (or ready to be sent) within the first few trading days of the fourth quarter. And in doing so, our subscribers can show clients they are on top of markets regardless of the calendar.

Now, I know what you’re thinking. It’ll never get through compliance.

But, we have hundreds of financial advisors that subscribe 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.

But we can only explain the letter so much. To get the real value of our letter, you need to see it for yourself.

So, we’ve included our Q2 2019 Sevens Report Quarterly letter that was sent to paid subscribers on July 1st, so you can see exactly what the product looks and feels like:

Quarterly Insights – July 2019

Optional Title #1: Volatility Returns but Markets Remain Resilient

Optional Title #2: Trade Uncertainty and Expected Fed Rate Cuts Make for a Volatile Quarter

Optional Title #3: Stocks Remain Resilient Despite Rising Volatility

Optional Title #4: Positive Market Fundamentals Overcome Increased Uncertainty in the Second Quarter.


Dear Client,

Third Quarter Market Outlook

Markets were impressively resilient in the second quarter and registered gains despite the deterioration in global economic activity and renewed uncertainty with U.S.-China trade. But, our years of experience have taught us not to become complacent just because markets have been resilient, and we think that’s again appropriate as we start the second half of the year.

Reductions in interest rates by the Federal Reserve, while welcome, are not a panacea for the U.S. and global economies. And as we start the third quarter, we face macroeconomic uncertainty on multiple fronts.

First, the U.S.-China trade situation remains delicate and very uncertain, and until there is a final agreement on a new U.S.-China trade pact, that lack of clarity will act as a headwind on economic growth and likely create temporary periods of volatility like we experienced in the second quarter.

Looking at the global economy, growth metrics underwhelmed in the second quarter, although the impact on global stocks was muted by rising market expectations of more stimulus from global central banks, including the Fed. But, if we see further deterioration in global and U.S economic indicators, that will also likely be a source of elevated volatility across markets.

Additionally, there are several unsettled geopolitical situations that must be monitored, including Brexit (the deadline is October 31st), North Korea (relations are still unsettled despite the recent Trump/Kim meeting) and Iran (the chances of a U.S.-Iran military conflict are as high as they’ve been in years).

Finally, while the Federal Reserve has signaled it will begin to reduce interest rates in the coming months, the situation remains very fluid, and if the Fed does not meet market expectations by cutting rates, that will cause short-term volatility.

It remains unclear how, or when, these events will be resolved, and what those implications will be for markets. Yet as 2019 has shown us so far, uncertainty is not, by itself, enough to offset the still-strong fundamentals in the U.S. economy and corporate America.

Instead, these and other market uncertainties require an intent focus on financial markets, economic data and political news. Put more generally, markets always face uncertainties at the start of a new quarter, but over the long term, it is core economic and corporate fundamentals that drive market returns—not the latest sensational headlines.

At John Doe Advisors, we understand that volatility, whether it’s related to trade disputes or concerns about Federal Reserve policy, can be unnerving, even if it is historically typical. That’s why we remain committed to helping you navigate this ever-changing market environment, with a focused eye on ensuring we continue to make progress on achieving your long-term investment goals.

Our years of experience in all types of markets (calm and volatile) have taught us that successful investing remains a marathon, not a sprint.

Therefore, it remains critical to stay invested, remain patient, and stick to a plan. That’s why we’ve worked diligently with you to establish a personal allocation target based on your financial position, risk tolerance, and investment time horizon.

The strong first-half returns notwithstanding, we understand that volatility can be both unsettling 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

This week, I began the outline that will form the basis of this quarter’s letter, because my goal for each letter is that it gets you better retention and more clients – and that means it’s got to be great!

Look, it’s not hard to write a quarterly recap – but it is hard to write a letter that strengthens the relationship between you and your clients.

That process can be extremely difficult and time-consuming.

According to advisors I spoke with when I first started producing Sevens Report Quarterly Letter, the process for advisors writing their own letter went something like this:

A few days after the quarter ended and the new one began, an outline is started and a rough draft is written.

Then, after a few days (or even a week) the letter is ready for peer review, so you send it around the office for input and re-work it further after that.

Then, you send it to the compliance department and wait for their feedback and changes.

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 is written in a clear, concise and plain-English format (similar to how we write the Sevens Report and Sevens Report Alpha).
  • A timely letter. The Sevens Report Quarterly Letter is delivered on the first trading day of the new quarter.
  • A separate compliance backup document that provides back up for any subjective claims, as well as any numbers or statistics referenced in the letter.
  • 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

Now is the time to ensure you’re not scrambling to produce a quality letter at the beginning of October because we both know the volatility in this market isn’t over yet.

Simply click this link to reserve your copy of the Q3 Sevens Report Quarterly Letter.

Quality Research at a Compelling Value

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 the cost by 80% per quarter. Or by 82%, annually.

Now, that’s a serious discount.

A Sevens Report Quarterly Letter subscription costs just $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 by 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 

Historically typical volatility returned in the second quarter as uncertainty regarding U.S.-China trade relations, future Federal Reserve interest rate policy, and the state of the U.S. and global economies caused a more-than-6% pullback in the S&P 500 during May, before stocks broadly recovered in June and finished the quarter near fresh all-time highs.

In sharp contrast to the quiet, steady gains of the first quarter, stock market performance in the second quarter was one marked by extremes. The S&P 500 logged a 4% gain in April thanks to solid first-quarter corporate earnings reports, which further reduced concerns that earnings growth peaked in 2018. Additionally, due in part to statistics that showed inflation well below the Fed’s target, investors’ expectations for a 2019 Fed interest rate cut rose in April, which added fuel to the bullish fire. The S&P 500 ended April near new all-time highs.

Volatility returned in the first week of May, however, as President Trump announced via Twitter that he would be raising tariffs on $200 billion in Chinese goods from 10% to 25% following the collapse of U.S.-China trade negotiations. Furthermore, the president threatened to levy additional tariffs on the remaining $325 billion worth of Chinese products imported into the United States.

The news caught investors by surprise as reports previously implied a U.S.-China trade deal was close to being finalized, and stocks dropped sharply in reaction. Further escalating the U.S.-China trade conflict was the decision by the Commerce Department to add the Chinese telecom company Huawei to its “Entity List,” which would effectively ban U.S. companies from doing business with the telecom giant. That development further pressured stocks. Moreover, Federal Reserve Chairman Jerome Powell sewed doubts about any future interest rate cuts when he described low inflation as “transitory,” and implied the Fed was not as open to an interest rate cut as investors anticipated. That combination of factors weighed on markets throughout May and the S&P 500 fell to its lowest levels since early March.

The stock market was able to find support and rebound strongly in June, however, as there was progress across the two main sources of volatility in the second quarter, U.S.-China trade and future Fed interest rate policy. First, at the June 19th meeting, the Federal Reserve reversed course from May and signaled an interest rate cut is likely in 2019, perhaps as early as July. That shift helped to re-validate market expectations of lower interest rates in the near future, and stocks rebounded strongly on that expectation. Second, President Trump and Chinese President Xi Jinping agreed to meet at the recently held G20 meeting, and the result of the meeting was a trade “truce” of no new tariffs while trade negotiations resume.

In sum, investors had to stomach another bout of volatility in the second quarter and macroeconomic uncertainty has increased compared to the first three months of 2019. However, underlying fundamentals for the economy and the markets remain generally solid, and investors are now anticipating the first Fed rate cut in over a decade as well as an extended “truce” in the U.S.-China trade conflict—both of which should be further supportive of the stock market. So, while we should prepare ourselves for more historically typical volatility, the outlook for markets remains generally positive as we begin the second half of the year.

Second Quarter Performance Review – A Mixed Quarter

Despite the uptick in volatility in the second quarter, U.S. stock market performance still resembled that of the first quarter as rising hopes for Fed rate cuts and a U.S.-China trade truce resulted in broad gains across most market segments and sectors.

By market capitalization, large caps outperformed small caps, which is a reversal from the first quarter. Large-cap outperformance was partially due to investors reacting to underwhelming economic data, as large caps are historically less sensitive to a potentially slowing economy. Increased hopes for a U.S.-China trade truce in late June also helped large caps outperform as they have more exposure to global trade. From an investment style standpoint, growth again outperformed value mostly due to another quarter of strong returns by tech and consumer discretionary stocks.

On a sector level, 10 of 11 S&P 500 Index sectors finished the second quarter with positive returns; however, consumer staples and the financial sectors were the notable outperformers. Consumer staples were driven higher by solid earnings and investors’ desire for some insulation from a loss of economic momentum and trade uncertainty, while financials benefitted from rising expectations for a Fed rate cut and the late-quarter steepening of the yield curve.

The energy sector, meanwhile, experienced negative performance in the second quarter mainly because of declines in the price of oil. The healthcare sector also lagged the S&P 500 thanks to rising political risks via increasing calls for the expansion of government healthcare programs, dubbed “Medicare for All.”  

Looking internationally, foreign markets also had positive returns for the second quarter, but once again underperformed the United States. Foreign developed markets outgained emerging markets due to several factors, including less sensitivity to volatility in foreign trade relations, a stronger dollar (for most of the quarter) and rising hopes for more stimulus from the European Central Bank. Emerging markets, meanwhile, were restrained by concerns about global economic growth and pressures from a mostly stronger U.S. dollar. However, a late-quarter decline in the dollar coupled with rising U.S.-China trade optimism helped emerging markets register a slightly positive gain for the quarter.

Commodities saw mixed returns for the quarter, as gold surged to a multi-year high while oil declined. Gold rallied in the second quarter due to multiple factors including rising expectations for Fed rate cuts, an increase in geopolitical tensions (especially with respect to the U.S. and Iran) and the late-quarter declines in the U.S. dollar. Oil, meanwhile, was volatile last quarter as short, sharp geopolitically driven rallies were offset by rising concerns about declining demand and potential oversupply as U.S. oil production hit another record high in the second quarter.

Switching to the fixed income markets, performance largely reflected investors’ expectations for future Fed rate cuts, and that was positive for the broad bond markets. The leading benchmark for bonds (Bloomberg Barclays US Aggregate Bond Index) realized more positive returns in the second quarter as rising anticipation of future rate cuts, combined with worries about economic growth and increased geopolitical concerns sent bond indices decidedly higher in the second quarter.

Looking deeper into the fixed income markets, longer-duration bonds outperformed those with shorter durations during the second quarter, which is a continuation of what we observed in the first quarter and reflective of a market that is forecasting future rate cuts and slower economic growth.

Corporate bonds, both investment grade and high yield, again handily outperformed government bonds in the second quarter thanks to a better-than-expected earnings season, and the rising expectations for a future Fed rate cut. Both investment grade and high yield bond funds again posted very strong returns.