Live Sessions
Market Update: Aug 13 2020
- "Stay-at-Home" Stocks
- Presidential Election
Here is a recap of our live Q&A session held on 8/13/20 presented by Joe Randazzo JD, CFP® from FNA Wealth Management and Dave Stone CPA, CFP® from Tartan Wealth Management.
Details for our next session, August 20, can be found here.
What are you watching in the stock market over the coming weeks?
We have seen the market continue down the path of the big tech companies driving returns this year. The NASDAQ has been setting records and closed above 11,000 mark for the first time in history on August 6th. The growth vs. value spread has been getting wider each week over the last month. It appears to us that investors have looked upon the big tech names as their safe investment. When economic news is less than favorable the big tech and the “stay-at-home” stocks we have discussed have led the market.
These are the things we are watching over the next few weeks:
-Earnings announcements for the big tech companies…WILL INVESTORS SELL THE NEWS?
-COVID 19 cases on the rise in numerous states. Will states go back to lock-down mode? Phase 3 of vaccines and progress toward a vaccine by end of year.
-What will the new stimulus package look like and when will it get done?
-Will growth vs. value difference continue to widen?
-Gold prices at all-time high and dollar weakness.
-Less than 100 days from 2020 election.
These are only a few of the issues that could impact the markets and create more volatility over the coming months. We think it is likely that the market could pull back 10-15% over the next few months. Therefore we feel clients should continue to consider dollar cost averaging in to the markets.
What impact could the election have on the markets?
There are 3 possible results from the election and their potential impact on the markets.
- Status quo – Trump wins and Republicans maintain majority in Senate Possible impact: Continuation of Tax Cut Jobs Act policies and possible payroll tax cuts or capital gains cuts.
- Biden wins and Democrats control both House and Senate Possible impact: Roll back of Trump tax policies.
- Biden wins and Republicans maintain Senate majority. Possible impact: Gridlock on tax issues and spending.
The views and opinions expressed herein are those of the author(s) and date noted and may or may not represent the views of Beacon Financial Advisory 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. There is no guarantee that any strategies discussed will result in a positive outcome. You should discuss any legal, tax or financial matters with the appropriate professional.
The NASDAQ is an index that tracks the cumulative results on a market capitalization basis of all stocks trading in the NASDAQ system. You cannot invest directly in an index.
Growth investments focus on stocks of companies whose earnings/profitability are accelerating in the short term or have grown consistently over the long term. Such investments may provide minimal dividends which could otherwise cushion stock prices in a market decline. Stock value may rise and fall significantly based, in part, on investors' perceptions of the company, rather than on fundamental analysis of the stocks. Value investments focus on stocks of income-producing companies whose price is low relative to one or more valuation factors, such as earnings or book value. Such investments are subject to risks that their intrinsic values may never be realized by the market, or such stock may turn out not to have been undervalued. Investors should carefully consider the additional risks involved in both growth and value investments.
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