Market Update: Jul 23 2020
- Presidential Election
- Market Movers
Here is a recap of our live Q&A session held on 7/23/20 presented by Joe Randazzo JD, CFP® from FNA Wealth Management and Dave Stone CPA, CFP® from Tartan Wealth Management.
Details for our next session, July 30, can be found here.
I’m starting to get nervous about this year’s election and how it will impact the market. Do we still stay the course?
In my firm opinion, you should absolutely stay the course. Let us reiterate something we’ve mentioned in many of these calls regarding looking at single events like an election. It’s important that you reevaluate your true risk tolerance, time horizon, and expectations you have of your own portfolio. An election is typically something we rebalance out of and not into. In other words, assess where things are after the outcome is known and where you think strengths and weaknesses in the economy or market may show themselves given the outcome, and then rebalance accordingly.
I’ll take you back to 2016 and remind you that there were several headlines and online media sources that had the general public convinced that the stock market would crash if President Trump were elected. I remember watching the election at 10:30 that evening with Dave and seeing Trump start to pull away, and we watched the stock market futures as they were plummeting several hundred points. And so, those that went to cash ahead of the election and followed the media scare had their moment. However, the day following the election the market completely reversed course and ended positives by several hundred points. And, politics aside, it’s been a good ride since.
Lesson learned: don’t panic by buying into the speculation of where things may or may not go. Wait until you have concrete information and then reassess.
Any specific areas in the market that you think are still attractive?
As you know, we’re not stock jockeys or trend followers. That said, there are some areas that may show some opportunity:
- Trends which we think may be accelerating:
- Remote Delivery Streaming Services (Including equipment for the same)
- A growing demand for 1st time housing (perhaps triggered by an increased desire to move to suburbs)
- Companies that focus on outdoor trends which may have been spurred by COVID, RVs or motorhomes, for example
- While still highly speculative, perhaps some increased interest in companies that benefit from reopening, such as Hotels, airlines, restaurants, etc.
Again, these are all speculative areas in this time of extreme uncertainty and these are not necessarily areas we are recommending clients invest in. Rather, areas that may see more of a rebound if the economy continues to move along.
The views and opinions expressed herein are those of the author(s) noted and may or may not represent the views of Capital Analysts or Lincoln Investment. The material presented is provided for informational purposes only. Nothing contained herein should be construed as a recommendation to buy or sell any securities. Past performance is no guarantee of future results. No person or system can predict the market. All investments are subject to risk, including the risk of principal loss.