To say there has been a great deal of turmoil in the market/economy would be a gross understatement to say the least.
Unprecedented is the correct word!!!!
Many economists are cautioning a “double-dip” recession could unfold while many market analysts are calling for another downturn in the market. With that said, it appears nobody cares at all about what the likes of Goldman Sachs or JP Morgan have to say. Perhaps so many investors have been burned by these firm’s past rhetoric at every market turn. The result look as if there are less and less folks actually listening to these “professional” and “high profile entities” as of late.
As to the market, we believe you can literally throw out any and all fundamental concerns until a point in time when the market’s recent momentum (since late March) comes to an end. Yes, we know second quarter company earnings will be most horrific and add to this the possibility of a new wave of coronavirus infections or a multitude of other negative issues that could affect the economy and the markets.
We are watching/tracking the market (all news wires and TV business channels) minute by minute for anything that might signal another steep downdraft is about to happen (and as of this writing, it appears this could possibly be in the “works” at this time). In the meantime, we continue to maintain a “goodly” percentage of cash in accounts should this scenario unfold.
At this juncture, we are looking at some short-term trading, when (and only when) the opportunities present themselves. We were able to do this a couple of weeks ago to help boost returns. If the market does turn downward again, we will also look to take advantage of some of the “inverse” instruments that gain in value as the market falls.
As to current portfolios, we have not sold any holdings except those bought primarily for income where they are now filing notice “suspending” their dividends. The remaining portfolio holdings continue to pay their dividends and produce the income intended all while working to regain their underlying values. In our opinion, when we get past the peak of this pandemic, economic storm and the upcoming election, we believe most, if not all values will come back along with the recovery of the economy and the market. If it becomes clear any of the investments are not regaining their values as they should when the market begins to recover, we will divest them.
Our consensus has been not to make buys until the market reveals more stability unless, we ascertain overwhelming indications of an individual stock or sector’s ability to outperform in this current volatile and unstable environment.
Be assured, we are doing our very best to preserve principal and the good news is we are seeing healthy percentage gains since the horrific sell of back in March.
Please call/email us if you have any questions.