• Welcome to Mainstay Capital Management

    Welcome to Mainstay Capital Management

    We are an independent, fee-only, Registered Investment Advisor. As a fiduciary to our clients,
    we offer truly objective investment advice with only your best interests in mind.

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    When Your Investments Demand Professional Management

    Mainstay Capital Management can bring you the peace of mind that comes with knowing you have planned prudently for your future.

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    Together, we can create a plan to get you on the right path towards and through retirement.

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    Investment Management Solutions

    Our team will manage your investment portfolio consistent with your personal retirement plan.

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  • Individual 401(k), 457, and 403(b)  Account Management

    Individual 401(k), 457, and 403(b) Account Management

    We specialize in the management of individual 401(k), 457, and 403(b) accounts for employees and retirees.

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  • Client Service Built on Trust

    Client Service Built on Trust

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    we can offer advice and comprehensive solutions for all of your financial planning needs.

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(excerpt)

Broad market averages finished 2014 at or near their all-time highs, confounding a number of market experts who have spent considerable time and effort discussing the likelihood of a market correction, only to witness the appetite for stocks, and the resulting momentum, continue. As we look ahead to 2015, those same familiar voices of pessimism are out there. However, at this point, even the most optimistic market participants have found it wise to step back, question their convictions, and assess whether this rally can continue.  

More than any single factor, the market’s rise has been fueled by Federal Reserve policy that has consistently pushed aside the fear of higher interest rates. In her most recent statement in December, Janet Yellen asserted that investors should be “patient” about the timing of an interest-rate hike, and indicated that the Fed was prepared to keep rates low. …

…Given the likelihood that low rates cannot and will not continue forever, prudent investors will recognize this fact and reallocate to those sectors that would benefit the most from this prospective environment. One such sector is financial services.

Certainly, the financial-services sector has had a great deal to offer as a value play. Share prices of many of the large money-center banks have still not fully recovered from the declines precipitated by the 2008 financial crisis, and even many of the healthier players have lagged the S&P 500 in the six-year period from the end of 2008 to 2014. Price-to-earnings and price-to-book value ratios are consistently cheaper for financials as compared to the overall market.

Because the financials are consistently cheaper, some are concerned that the sector is a classic “value trap.” Why are the financials cheaper? It might have something to do with the industry’s changes since 2008, such as higher government regulation that has hampered firms’ capacity to diversify revenue streams and grow earnings. Low rates and a flattening yield curve mean that net-interest margin, the spread between a bank’s cost of capital, and what it earns from loan activity, is not as predictable as it was a decade ago. …
 
…Higher interest rates, when they are announced by the Fed, will likely precipitate a knee-jerk negative reaction from the market. Then when the dust settles, the fact that banks tend to thrive in a growing economy, coupled with the fact that higher interest rates means higher net interest margin, will collectively serve as a catalyst for investors in the sector. This especially as higher net interest margin largely goes right to the bottom line for banks since it’s a business with higher fixed costs and lower variable costs.

How should you best position your portfolio to take advantage of these potential trends? It’s often times perilous in this sector to bet on a single stock or company and expect it to capture the trend, particularly given the company-specific issues (e.g., bad trading losses) that harmed so many investors in Lehman Bros. (among others) during the 2008 crisis period. Fortunately, there are a number of sector ETFs that offer a basket of stocks and the ability to take more of a direct focus, say on the regional banks, or on the small- and mid-cap end of the spectrum. … 

 

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  • Americas Top Wealth Advisors 2020
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  • 2018 Top 100 Barron's
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    • Americas Top Wealth Advisors 2020
    • Financial Advisor
    • 2018 Top 100 Barron's
    • Financial Times
    • Financial Planning

      Recent Media Appearances

      Bloomberg

      David Kudla, Mainstay Capital Management founder and chief executive officer, discusses Fed policy and how tariffs could change market outlook.

      FOX Business

      Mainstay Capital Management CEO David Kudla joined Maria Bartiromo on Fox Business TV to discuss the economy and where stocks are headed next.

      CNBC

      CNBC’s Steve Liesman interviews Federal Reserve President Charles Evans live from the ENGAGE Undergraduate Investment Conference.