It’s Wednesday morning and both the Nasdaq and S&P 500 hit new highs yesterday. As of now (11:52 a.m. in the east) both indexes are up again. When discussing the markets, which I end up doing many times each day, I keep getting the same questions and comments:
- Why does the market keep going up while the economy and GDP have dropped so much?
- How long can the market continue to go up?
- When will the market take a big dive south? How bad will it be?
- Will the election have a major impact on the market and will it depend on who wins?
All very good questions. Good answers are elusive since all we can do is prognosticate, but none of us knows what the future has in store for us. Did any of us really foresee a pandemic when we were drinking champagne on New Year’s Eve?
In talking with a few investment gurus lately, and from what I’ve been reading, it seems like there could end up being a lot of volatility as we get closer to the election. It could possibly continue through inauguration day. Maybe longer. Some are predicting a test of the bottom again. Who knows, but let’s hope not.
We continue to do our best to keep up with sector rotation. Those clients invested in our “FRS” portfolios will see a few tweaks in these accounts this week. Kyle and Rob continually monitor the market and collaborate to keep our portfolios in line with the market.
What we know is that Covid-19 is still here, flu season is just around the corner, and schools reopen soon. We also know that, to date, Congress has not been able to negotiate another stimulus package. With unemployment still over 10% and with many folks still working from home, many sectors of the economy will continue to struggle. How will that affect corporate profits and ultimately the stock market?
Thinking of taking some chips off the table? Maybe moving some market funds to safety and protection? We should talk. Kyle, Rob, and I stand ready to look at options that might make sense in your situation. Let us know.
Enjoy the weekend
Peter