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 email@example.com 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
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
Disclosures regarding our performance reporting: Because some clients are in the 10% tax bracket and others are in the 37% Federal tax bracket, we have decided to report performance before taxes. If you have a non-qualified account, please feel free to contact us to determine your individualized rate of return after tax. All of Summit’s performance is after our 1.25% advisory fee that is deducted monthly. Your fees may be higher or lower depending upon the amount of assets invested with our firm. Feel free to contact us to receive online access so you can see your personalized rate of return. The Aggregate bond index we use is ticker: AGG. All dividends and distributions are reinvested and included in the performance. The S&P 500 index quoted above does not include dividends within the performance. If a holding within our portfolio does pay a dividend or other income, it is reinvested, so our performance does include dividends. This report has been prepared from data believed reliable, but no representation is made as to accuracy or completeness. Total return and principal value will vary depending upon the deduction of advisory fees, brokerage commissions, reinvestment of dividends and other earnings or fund charges. This information is provided to you in combined form, solely for your convenience and ease of review and is not an offer or solicitation to buy or sell any securities. In order to verify that all account values and transactions are accurate, we encourage you to compare the information provided in our statement with the statement you receive directly from your custodian. All written content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Past performance does not guarantee future results.