S&P 500 and Nasdaq have another poor September showing
For the stock market, Septembers historically are gloomy and September of 2020 was no exception. The S&P 500 was negative 3.92% and the tech heavy Nasdaq lost 5.16%. (Source: https://finance.yahoo.com/quote/%5EGSPC/history?p=%5EGSPC and https://finance.yahoo.com/quote/%5EIXIC/history?p=%5EIXIC). We’re always looking for opportunities to buy low, so we purchased some stocks in our portfolios in an attempt to buy the dip in the market, but the market kept heading south. As a result, our Moderate portfolio was down 0.84%. With the market down around 4%, losing less than 1% is not bad. The market has been recovering for the last week and has started October off positively as well despite the President’s recent Covid test. Our short term research continues to be optimistic for the stock market, and we plan to hold these stocks for a bit longer. However, everyone has their eyes on one thing: The presidential election.
How will a Trump or Biden win effect the market?
To predict the election results at this point is nearly impossible, because we learned in 2016 that you cannot trust the results of polling. As a result, we have prepared multiple plans: One for a Trump victory and one for a Biden victory. Our goal is to take advantage of the situation whoever wins, whether that means buying stocks in bulk, or potentially investing against the stock market to try to profit from a downturn. In the days leading up to the election, we plan to monitor the situation and we will consider hedging to potentially avoid losses, because we are not gamblers, we’re investors. We know both names on the ballot have a chance at victory. There is also a chance we won’t know after election night who is the victor because of mail in ballots, and we anticipate the market will not enjoy that uncertainty.
Increasing the complexity is what may happen in the senate and house of representatives, because a large swing to one party or the other will also affect the markets. Bottom line: We plan to do everything in our power to protect and grow your money in 2020, despite the coronavirus and the election. By reviewing your portfolio holdings at TD Ameritrade daily, we believe we have the potential to accomplish that goal.
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. Please 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 Wink, Ken Wink, Jim Wink and Zach Bachner
Special Request: If you have a friend or family member who has investments and they are concerned about losing money in the market, please have them contact us to receive a complimentary second opinion. We can analyze their existing holdings and show them (through independent research) what hidden fees they may be paying, as well as provide a risk assessment. Call us (586) 226-2100 or respond to this e-mail and we’ll contact them.
In August, it only took 22 days to sell a home in America, matching the fastest rate on record. Source: CNBC, September 22, 2020
Since 1972, the stock market has rallied from Election Day (or shortly thereafter) until the end of the year on 10 of 12 past such occasions, with an average gain of 7.2%. Source: -MarketWatch, August 18, 2020
This year has been topsy-turvy and upside down for so many reasons. So, it’s probably little surprise that something else you thought would never happen, happened: Vinyl records have outsold compact discs for the first time in 34 years. Source: -Bloomberg, September 10, 2020
A Confederate memorial that stood on the courthouse lawn in Lake Charles, Louisiana, for 105 years was toppled by Hurricane Laura’s historic winds – just two weeks after local authorities voted not to remove it. Source: -New York Times, August 27, 2020
A surge in home renovations and do-it-yourself projects during the pandemic has driven lumber prices up 134% year over year. That adds around $14,000 to the cost of building a new home. Source: -Fortune, August 31, 2020
The U.S. imprisonment rate is at its lowest level in more than two decades, with the greatest decline coming from black Americans, whose imprisonment rate decreased 34% since 2006. Source: -Pew Research Center, May 6, 2020
In July, even though there were 75% fewer screened airport passengers than the previous July, the TSA found guns at three times the rate. Eighty percent of the guns were loaded. Source: TSA, August 10, 2020
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