May ended up being a profitable month for our portfolios and a profitable month for the major stock market indexes as well. We’re still quite a bit ahead of the DOW in our in-house managed portfolios year-to-date.
There are a lot of conflicting issues to consider this month. There continues to be protests, both peaceful and violent, across the country because of the death of George Floyd. The Coronavirus pandemic continues to take lives, but at a much slower pace than a few months ago. On June 5th, 2020, the US Labor Department reported a net gain in jobs rather than the expected job losses. We believe the US will not return to pre-Covid employment numbers for a long time, but it’s an encouraging sign in any case.
The start of June has been positive for the US markets. By many measures, this is once again the most overvalued market in 80 years because corporate earnings have dropped so much because of the business shutdowns related to Covid. Stocks are not a good value by historical standards, but that doesn’t mean they cannot keep going up, so we’re digesting that.
Our portfolios are currently set to a more neutral/defensive positioning because the probability of a short-term pullback has increased dramatically in the past week. However, if the market marches higher, we will fundamentally re-construct our portfolios in anticipation of further stock market gains in an effort to take advantage of the situation.
We’ll continue to provide timely updates and in the case of our in-house managed TD Ameritrade portfolios, monitor your accounts daily.
If you have any questions about taxes, your individual investment portfolio, our 401(k) recommendation service, or anything else in general, please give our office a call at (586) 226-2100. Feel free to forward this commentary to a friend, family member, or co-worker. If they would like to receive this commentary in the future, please send us an e-mail at info@summitfc.net at your earliest convenience. If you have had any changes to your income, job, family, health insurance, risk tolerance, or your overall financial situation, please give us a call so we can discuss it.
Thank you for your confidence and referrals!
Bob, Ken, Jim, and Zach
Summit Financial Consultin
Interesting Points
Online sales of pajamas surged 143% in April from March, while purchases of pants fell 13%. Source: -CNBC, May 12, 2020
Exxon Mobile lost $610 million in the first quarter, its only loss since 1988. With plunging global demand and collapsing prices, earnings from its oil and gas production fell 91% from a year ago. -Reuters, May 1, 2020
U.S. spending on food away-from-home accounted for 54.4% of total food expenditures in 2018. Source: -USDA, August 26, 2019
At least 89 coronavirus vaccines are under development around the world, with seven now in human trials. Pfizer says that if its vaccine proves safe and effective, it might be available on a limited basis as early as September. The most quickly developed anti-viral vaccine to date was the one for mumps, licensed in 1967 after four years of research. Source: -International Business Times, April 30, 2020
The incidence of STDs in New York City has plunged 80% since the start of the pandemic, an obvious benefit of social distancing. -The New York Post, April 25, 2020
In March, children’s melatonin supplements- chewable gummy bears laced with one milligram of the sleep aid, saw sales pop 87% year-over-year. Source: -The New York Times, May 18, 2020
Only 51.3% of adult Americans now have a job- the lowest percentage on record since the BLS started tracking that number in 1948. Source: -CNN, May 8, 2020
Notes & Disclaimer: Stock market indices, like the S&P 500 Index, are unmanaged groups of securities considered to be representative of the stock market in general or subsets of the market, and their performance is not reflective of the performance of any specific investment. Investments cannot be made directly into an index. Historical returns data are calculated using data provided by sources deemed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness, or correctness. This information is provided “AS IS” without any warranty of any kind. All historical returns data should be considered hypothetical. Past performance is no guarantee of future results.
This communication is only intended for recipients who reside in states where our agents are licensed to sell these products. Investment advisory services are offered through Summit Financial Consulting, LLC, an SEC registered investment advisor. Registration does not imply a certain level of skill or training. Summit Financial Consulting Investment Advisor Representatives do not render tax, legal, or accounting advice. Insurance products and services are offered through Summit Financial Consulting, LLC. Note: Please update Summit Financial Consulting, LLC, if your investment objectives have changed or if the personal or financial information previously provided has changed. The investment advisory disclosure document that describes Summit Financial Consulting investment advisory services account is provided to you annually. Please consult Summit Financial Consulting for a copy of this document should you need an additional copy. All guarantees are subject to the claims paying ability of the issuing insurance company. Past performance cannot predict future performance. It is not possible to invest directly in an index. The Sherman Group, LLC is not associated with Summit Financial Consulting, LLC in any way, other than a research sharing partnership. Back testing is more heavily scrutinized than any other type of investment analysis because it can be updated to take advantage of past data. The algorithms and trading signals that we receive from the Sherman Group, LLC were created using back testing with the goal of creating a sustainable research process. We have reviewed data from the entire 20 year period which was mostly back tested, and have also personally reviewed the live data for the past 5 years and feel comfortable with it, but we encourage you to meet with us and ask questions so you are fully informed on what we plan to do with your investment assets at TD Ameritrade. It is important to look at fees, taxable repercussions, and trading frequency when looking at a rate of return number. There is no perfect system or research feed, and Sherman Group, LLC has had both longer term and short-term periods where they lost money. Investing involves risk, and these portfolios are no exception.