Déjà Vu, All Over Again

Retirement, Income, Tax & Estate Planning.

Déjà Vu, All Over Again

November 19, 2020 Investing Newsletter Stock Market 0

With Thanksgiving just a few days away, we know Christmas and New Year’s can’t be far behind. Few of us can’t wait to put this year behind us. Nothing seems to be the same, including most likely your Thanksgiving celebration next week.

So often when I’m talking with clients, they ask me the same question. They want to know with the pandemic seemingly getting worse, with hospitals again filling up, with shutdowns and lockdowns on the rise, with millions of folks still unemployed…why is the stock market continuing to go up?

I reached back into our archives and here’s what I wrote exactly one year ago, referencing a few articles that were circulating at the time. Not much has changed.

Public Pension Plans Continue to Shift into U.S. Stocks

Pension funds continue to reallocate funds and move money out of fixed income and into the market. More demand for stocks means higher prices.

Ready to Boost Stocks: Investors’ Multitrillion Cash Hoard

Assets in money-market funds are at a decade high with over $3.4 trillion socked away in cash. With interest rates still declining, more folks are starting to move funds out of cash. Guess where it’s going? Yep, into the stock market.

Foreign Money Supports U.S. Stocks’ Rally Back to Record Highs

While many in the U.S. don’t think the economy and markets are that good, compared to most of the rest of the world our markets are doing great. Our stock market and our economy are kind of like the cleanest dirty shirt in a bag of dirty laundry. Again, guess what foreign investors are doing? Buying U.S. stocks. Again… more money chasing the same number of stocks seems to be pushing the market higher.

Will the rally continue? How much longer will it go? Is a recession on the way? All good questions, and I don’t have answers to any of them. And of course… the crystal ball is still cloudy, but may the rally continue.

Last year, my crystal ball was cloudy… and it still is. But with our conference rooms practically empty for months and months, our crystal balls are not only cloudy, they’re dusty too.

What lies ahead in the market? Nobody knows. As I keep saying, the market will do what the market will do. As I wrote last week, if you are a long-term investor, you probably have nothing to worry about. Short-term could continue to be rocky. Fasten your seatbelts. If the overall market has you spooked, let’s talk about moving some funds to a safer place.

Enjoy the weekend…
Peter