HAPPY SPRING TO ALL.
Here we are in the traditional “sell in May, go away” timeframe but, with everything coming out of Washington, who knows if this old “adage” will work at this time. What we see happening, almost on a daily basis is that the market is moving to all news that the White House or Congress broadcasts.
Does the market look “toppy” here, yes, it does, so we must remain cautious of any “negative” type news coming from D.C. as the market reacts swiftly and harshly when this happens. On the flip side of this is when the White House and Congress agree on something, then the market reacts upward as a “positive”.
A LITTLE MARKET 101 INFORMATION and EDUCATION
As you may or may not know, there are several indices that make up the market. It is not just the Dow Jones (the smallest of the indices and represents only 30 stocks) that the news media refer to most often. For example, there is the Russell 2000 index that covers the small cap sector, the Nasdaq that follows many of the high tech companies, The S&P 500 that covers mostly the large cap stocks. Then we have the Transportation index that follows transportation stocks, the Utility index that follows the utility companies.
All of these are inter-connected and together, they all make up THE MARKET you read and hear about.
Just last week, the Nasdaq and Russell 2000 made “new all-time highs” while the S&P 500 did not and the transportation and Utility indices have been just going sideways with no attempts at making new highs.
What does any of this mean to you, the 401(k) participant or investor? Not a lot but this is what we monitor on an hourly and daily basis to help us keep you informed so we can properly alert you when we see a major shift in market direction about to happen.
For the present, sit back and enjoy the increases in account values. When/if we see any major shift in market direction about to unfold, we will most certainly keep you posted as what to do to help protect your accounts.
SECTORS
With the continued statements coming from the White House, we still recommend the funds containing infra-structure type stocks, financials (the banks), technology stocks and healthcare (that has rebounded nicely this year).
We invite you to contact our office so we can share with you which funds in your plan contain these types of stocks and also have a complete review of your account.
