wealth management

PYGG breidt activiteiten verder uit met Wealth Management 150 150 pygg

PYGG breidt activiteiten verder uit met Wealth Management


Willemstad, Curaçao, 9 augustus 2022 – PYGG Capital Partners (“PYGG”) breidt haar activiteiten verder uit met beleggingsadvies, vermogensbeheer en dienstverlening op het gebied van virtuele activa. Voortbouwend op het bestaande businessmodel en ingegeven door vraag vanuit de markt, opende PYGG een Wealth Management afdeling, inclusief Crypto Desk.

“Curaçao is van oudsher een thuis voor vermogensbeheer en positioneert zich steeds nadrukkelijker als een aantrekkelijke locatie om te wonen, werken, innoveren en investeren” zegt Frank Lammers, medeoprichter en directeur bij PYGG. Lammers: “Met de combinatie van persoonlijke op maat gesneden service én op moderne technologie gebaseerde dienstverlening richten we ons op particuliere en institutionele beleggers in de regio”.

PYGG kent naast deze nieuwe activiteiten ook nieuwe gezichten. Janine Laclé en Cees Quirijns zijn toegetreden tot de directie van PYGG. Laclé is een bekende in de Curaçaose private banking wereld. Zij was ruim 18 jaar werkzaam voor CIBC FCIB Wealth Management en diens rechtsvoorganger, ABN AMRO. Quirijns is al sinds eind jaren ’90 van de vorige eeuw actief in de beleggingswereld, ondermeer als beurshandelaar bij Eureffect Stockbrokers in Amsterdam. Later bekleedde hij diverse analist-, adviseur- en vermogensbeheer posities bij onder meer Theodoor Gilissen en ABN AMRO.

“Janine en Cees kunnen als geen ander inhoud geven aan de persoonlijke en vooruitstrevende manier van werken zoals PYGG die voor ogen heeft. Wij zijn dan ook erg blij dat zij ons team zijn komen versterken”, zegt Lammers enthousiast.


PYGG is een onafhankelijke dienstverlener, die bedrijven en particulieren helpt hun financiële doelen te bereiken door gespecialiseerd en gepersonaliseerd vermogensbeheer, investment banking en fiduciare diensten aan te bieden. www.pygg.nl.




Housing market cools on interest rate increase 150 150 pygg

Housing market cools on interest rate increase

The Covid-19 pandemic profoundly altered the U.S. housing market. Homeowners and renters reevaluated their housing needs and wants as they spent more time at home. At the same time, remote work set off a great migration as employees decided where they wanted to live based on lifestyle rather than employer location. The two themes created a perfect storm of housing demand and overwhelmed homebuilders.

Figure 1 shows the annualized pace of housing starts and building permits steadily climbed after initially plunging during the depths of Covid-19. Housing starts and building permits each jumped to their 2006 highs, levels set during the last housing cycle boom in the lead-up to the 2008 financial crisis. Home and building material prices skyrocketed as housing demand outpaced supply. 

Recent datapoints indicate the housing market is cooling. Figure 1 shows the pace of housing starts and building permits declined during the first half of 2022, and data recently released by Redfin appears to confirm the slowdown. The real estate brokerage reported ~60,000 home purchase agreements fell through during June, equal to 14.9% of homes that went under contract. Based on Redfin’s analysis, it was the highest percentage on record with the exception of March and April 2020.

The ongoing housing market slowdown indicates the Federal Reserve’s interest rate increases are already impacting the economy. Keep in mind, this is part of the Fed’s plan ease inflation pressures by reducing demand for goods and services. However, the Fed’s actions are blunt and could start to impact more segments of the economy, such as manufacturing and retail sales. If you have read about rising recession fears, this is one of the catalysts behind the fears. Investors are concerned the Fed is too focused on inflation and will raise interest rates too fast and too high, slamming the brakes on the U.S. economy and starting a recession. 

All eyes remain on the Fed & inflation 150 150 pygg

All eyes remain on the Fed & inflation

The market’s focus on Federal Reserve policy remains unchanged as stubbornly high inflation forces the Fed to raise interest rates and shrink its balance sheet. The Fed’s aggressive tightening actions are increasing market volatility and causing stock and bond prices to trade lower. The S&P 500 is now in a bear market, which is defined as a -20% decline from recent highs, and interest rates are rising to multi-year highs. The 2-year Treasury yield recently rose to its highest level since 2007 as investors bet 40-year high inflation will push the Fed to be more aggressive. 

How does this tightening cycle compare to prior cycles? The most notable difference is the speed and size of the interest rate increases. Figure 1 compares the current cycle’s fed funds rate path against the last five cycles. Factoring in the +0.75% increase at this week’s June meeting, the Fed has raised interest rates +1.50% since the first increase in March. Investors expect the Fed to return to its +0.50% pace at the July meeting, which would make 2022 the fastest +2.00% increase compared to the last five cycles. The Fed is expected to keep raising interest rates at its meetings later this year, although the amount of the increases remains an open question.

The chart shows the current Fed tightening cycle has more in common with the 1988 and 1994 cycles than post-2000 cycles. It’s a market environment investors haven’t experienced in a long time. The Fed’s aggressive actions are driven by widespread price pressures across food, energy, housing, airfares, vehicles, etc. There are concerns high inflation could become entrenched, as well as significant uncertainty about how high and fast the Fed will need to raise interest rates to contain inflation. This raises a particularly concerning risk persistently high inflation could provoke the Fed to tighten too much and negatively impact economic growth. The result is a market trying to navigate uncharted waters.

Stocks & bonds both decline more than -10% during 2022 150 150 pygg

Stocks & bonds both decline more than -10% during 2022

The scatter plot below compares annual stock and bond returns since 1989. The dots represent the intersection of the S&P 500’s total return and the Bloomberg U.S. Bond Aggregate’s total return for each calendar year. The analysis highlights the challenging and unusual start to 2022. The ‘YTD 2022’ dot is the only dot in the lower left quadrant with stocks and bonds both declining more than -10% this year. If 2022 ended today, it would mark the S&P 500’s third worst year, and bond’s worst year, since 1989.

How unique is the current market environment? You will notice every year since 1989, except for 2022, is outside of the lower left quadrant. This indicates it is rare for both stocks and bonds to produce negative returns during a calendar year. Why are stocks and bonds declining together? The Federal Reserve is raising interest rates and shrinking its balance sheet by selling bonds, which pressures both stock and bond valuations. On the credit side, most bonds pay a fixed interest rate, which means bond prices must decline to offer a higher interest rate. On the equity side, interest rates represent the cost of money and are used as an input to value company shares. A higher interest rate typically decreases stock prices.

This year’s parallel stock and bond selloff highlights the importance of portfolio diversification not only across asset classes, but within asset classes. When you diversify your portfolio, you aim to invest in different asset classes that may react differently to the same event. The same principle applies within stocks and bonds. On a price return basis, S&P 500 Growth stocks are down -25.5% through May 11th, while S&P 500 Value stocks are only down -8.4%. In the corporate investment grade bond universe, Long-Duration (+10 Years) bonds are down -22.1% through May 11th on a price return basis, while Short-Duration (1-5 Years) bonds are only down -6.1%. 

U.S. personal savings rate drops to a decade-low 150 150 pygg

U.S. personal savings rate drops to a decade-low

The U.S. personal savings rate jumped to an all-time high of 33.8% in April 2020. Stimulus checks, enhanced unemployment benefits, and a decline in consumer spending all boosted personal savings during the pandemic. In addition, homeowners were able to lower their monthly mortgage payments by refinancing their home loans and locking in mortgage rates below 3% on a 30-year fixed loan. The increased personal savings sustained consumers during the pandemic and even helped some individuals pay down debt.

Fast forward to today, and increased savings are slowly being eroded. January 2022’s personal savings rate of 6.1% was the lowest since December 2013. Why did the savings rate drop from an all-time high to a decade-low in less than two years? The savings catalysts from the pandemic are diminishing, and in some cases reversing, as daily life returns to normal. The last round of stimulus checks was released over a year ago. Enhanced unemployment benefits lapsed as the unemployment rate dropped 3.6% during March 2022 and the labor market tightened. Consumer spending on services is rebounding as social distancing restrictions are relaxed.

Another large factor pressuring the personal savings rate is rising inflation pressures. The Consumer Price Index, which measures inflation, soared 8.5% year-over-year during March 2022. It was the fastest annual pace since December 1981 and a significant change from the 2010s when annual inflation held steady around 2%. Our team always stresses the importance of establishing a personal financial plan and sticking to it. The Covid pandemic was a lesson on the importance of being ready for the unknown, and today’s high inflation is a timely reminder that both life and the economy are unpredictable. Our goal is to help you be ready for what comes next.

How the Federal Reserve Impacts Your Portfolio 150 150 pygg

How the Federal Reserve Impacts Your Portfolio

The Federal Reserve increased the federal funds rate +0.25% on March 16th. The market expected the increase, but it will still impact bond yields and lending rates. The federal funds rate is the interest rate banks charge each other to borrow and lend excess reserves overnight, but it also influences the prime interest rate. In turn, the prime rate influences the interest rate on financial products, including credit cards, personal loans, and auto loans. The charts below examine how the Federal Reserve’s action may impact Treasury yields and lending rates.

Figure 1 charts the average percentage move across U.S. Treasury bond yields, the 30 Yr fixed rate mortgage, and the prime interest rate during the 24 months after the Federal Reserve first raises the interest rate. The chart shows longer maturity Treasury yields, such as the 10Yr and 30Yr, historically rise less than shorter maturity yields, such as the 2Yr. There is a similar dynamic across lending rates the 30Yr fixed rate mortgage, which has a longer maturity, historically increases less than the prime interest rate, which is typically a benchmark for shorter maturity loans. 

Why does this occur? The short-end of the Treasury yield curve is more sensitive to Federal Reserve policy, while the long-end of the yield curve is more sensitive to economic conditions. Figure 2 confirms this by showing shorter maturity yields and lending rates, such as the 2Yr Treasury and prime rate, historically increase more on an absolute basis than longer maturity yields and lending rates, such as the 10Yr and 30Yr Treasuries and 30Yr fixed mortgage rate.

How does this impact your personal finances? From a portfolio perspective, higher Treasury yields suggest bonds could produce negative returns. This is because bond prices generally decline as yields rise. Looking at borrowing costs, history indicates interest rates on auto and personal loans could increase significantly over the next 12 months, while mortgage rates could still increase but by a smaller amount. Higher interest rates will increase borrowing costs, which could in turn lead to decreased consumer demand. The Federal Reserve’s goal is to raise interest rates to ease inflation pressure, but it could have the added side effect of slower economic growth.

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