Memorial Day

Memorial Day

In honor of Memorial Day, we’d like to tell you a story about a man named Ben Salomon.

Ben Salomon was a dentist. He went to school, got his degree, and started his own dental practice at the tender age of 23. The most trying ordeal he was ever supposed to encounter was a mouth full of cavities or a particularly tricky root canal. But when his country called, he answered – serving as the dental officer for the 105th Infantry Regiment of the U.S. Army.

The year was 1942.

Ben Salomon was a dentist, but he still had to train like a regular infantryman. He qualified as an expert with both rifle and pistol and was even declared the unit’s “best all-around soldier” by his commanding officer. Soon, he was promoted to the rank of captain. Two years later, he went into combat – specifically, to an island in the Pacific called Saipan.

Ben Salomon was a dentist. But during combat, a toothache was the furthest thing from most men’s minds. The Battle of Saipan was fierce, with the U.S. suffering over 13,000 casualties. So, with little dental work to do, Salomon volunteered to go to the front lines, to replace one of the surgeons who had been wounded.

It was July 7, two days before the battle would end. As the U.S. advanced across the island, the wounded began to pile up, and it wasn’t always possible to transport them back to the regiment’s main base. So, Salomon set up a tent barely fifty yards from the frontlines to serve as an immediate aid station. Just after dawn, approximately 4,000 Japanese soldiers launched one of the largest counterattacks of World War II. Within minutes, Salomon’s tent filled up with wounded soldiers, many of whom had to be physically carried in. Undaunted, Salomon got to work, trusting the line would hold and the enemy be repelled.

That was when he saw his first Japanese soldier.

Ben Salomon was a dentist. But when he saw the foe attacking the wounded men lying outside his tent, he remembered his training. He grabbed a gun, fired, and returned to his work. But then, two more enemy soldiers entered the tent. Salomon dealt with these, too – only for another four to emerge from beneath the tent walls. Shouting for help, Salomon rushed them head on. He defeated three on his own; one of his wounded comrades stopped the fourth.

But the front lines were punctured, and the bleeding couldn’t be stopped. The enemy was overrunning the foxholes, and the aid station was doomed. Realizing what was about to happen, Salomon ordered the wounded men to retreat, supporting and carrying each other as necessary. In the meantime, Salomon said, he would hold the enemy off.

The wounded soldiers staggered out the rear of the tent. Ben Salomon left by the front.

When they found his body two days later, Salomon was alone, clutching a machine gun. The bodies of ninety-eight enemy soldiers were in front of him. He had seventy-six bullet wounds and dozens of bayonet wounds, many of them suffered while he was still alive. While he was still fighting.

Ben Salomon was a dentist. He was also a warrior, a patriot, and a hero.

***

Fifty-nine years later, Ben Salomon was posthumously awarded the Medal of Honor. This often happens with those who have died in battle. Their names are preserved in records, but entire generations can pass before history gives them their due.

Despite receiving the Medal of Honor, and despite the incredible heroism he displayed, few people have heard of Ben Salomon before. That’s not a surprise. After all, over one million men and women have died serving our country. They were all heroes, yet most can’t be found in history books, documentaries, or even Wikipedia articles. In a sense, Ben Salomon is fortunate. The Medal of Honor is given to those who have “distinguished themselves by acts of valor.” But surely there are tens of thousands of people who never received such a medal even after their death – because their own acts of valor are lost to time.

We think this is one of the reasons we observe Memorial Day every year. Whenever we visit a cemetery, whenever we flip through a photo album or scrap book, whenever we comb through the stories of our friends, family members, and ancestors who made the ultimate sacrifice, we commemorate the Ben Salomons of the world. They weren’t superheroes like you see in movies, with magical powers or unworldly strength. They were teachers and taxi drivers, farmers and factory workers, students and scientists. They were dentists. Every Memorial Day, we ensure their memories, their deeds, and their sacrifices are never forgotten, and thus never in vain. We award them our own personal medals of honor – for deeds that mean so much to the world, and everything to us.

That’s why we observe Memorial Day. To ensure that, while people die, valor lives on forever.

On behalf of everyone at Research Financial Strategies, we wish you a safe and peaceful Memorial Day.

Special Edition Commentary From Jack

Special Edition Commentary From Jack

I would just like to assure everyone that the Research Financial Strategies models are still fully invested, and we are still on a very strong technical buy chart. Please see the chart below. 

Our Growth Portfolio continues to outperform the S&P 500 benchmark in 2020 and we are maintaining the trend with positive portfolio returns for the year.   

If your investment portfolio is negative for 2020, let us give you a free, no-obligation 2nd opinion. We reacted and took advantage of the drop in the stock market. If your advisor had no plan for the recent market correction and only watched your portfolio lose money, then maybe it’s time to speak with us.

If anyone is interested in speaking with Jack about the stock market, an account review, your employer 401k allocations, or any other financial topic, please email me back and I will schedule a time that is convenient for you.  Remember, the team at Research Financial Strategies is here working for you! 

Weekly Market Commentary 05/18/2020

Weekly Market Commentary 05/18/2020

America is reopening, state by state.

That’s welcome news for many businesses, but we’re far from business as usual. Last week’s economic news included unemployment hitting an 80-year high, a record drop in retail sales (-16.4 percent), and an unprecedented decline in industrial production (-11.2 percent).

Weak consumer demand is also a concern, according to Matthew Klein of Barron’s. “…The pandemic has lowered consumer demand much more than it has damaged productive capacity. It’s much easier to bring factories back online than it is to get customers back into shops and auto dealerships…Unless consumption rebounds quickly, the world will soon be faced with an unprecedented glut of goods that can’t be sold.”

Some households may be able to sustain or increase consumption because of generous unemployment benefits. The Coronavirus Aid, Relief, and Economic Security (CARES) Act increased unemployment benefits by $600 per week. The intent was to provide Americans, who were out of work because of the pandemic, with income equal to the national average salary of $970 per week, reported Amelia Thomson-DeVeaux of FiveThirtyEight.

As it turns out, about 68 percent of those filing for unemployment – teachers, construction workers, medical assistants, food service workers, and others – are receiving more money through unemployment than they did from employers.

An analysis conducted by economists at the University of Chicago, and cited by FiveThirtyEight, found, “…the estimated median replacement rate – the share of a worker’s original weekly salary that is being replaced by unemployment benefits – is 134 percent, or more than one-third above their original wage.”

In recent weeks, the number of unemployed workers has grown to about 36 million, according to CBS News. Unusually high unemployment combined with unusually high unemployment benefits may mean some Americans may have more money to spend than they might have had otherwise. The combination could improve demand for goods. It also could make it more difficult for employers to persuade employees to return to work.

Last week, major U.S. stock indices finished lower.

Öffnungsdiskussionsorgien. The German language boasts many unique words with oddly specific meanings. You may be familiar with some German words that have become part of the English language such as schadenfreude (finding joy in other people’s trouble), wanderlust (an impulse to travel the world), and weltschmerz (sadness about the state of the world).

Amanda Sloat of ForeignPolicy (FP) reported the Germans have invented a new word to describe debates about when and how to reopen the world: Öffnungsdiskussionsorgien.

The goal of many leaders around the world is to minimize infection, minimize death, and minimize economic hardship. It’s a tall order and there is no ‘right’ answer. One thing is clear, though. People who have been on lockdown, no matter which country they reside in, have cabin fever. FP reported:

“An American expat in Spain promised her teary tween that for her 12th birthday she could help take the trash 50 yards to a communal receptacle across the courtyard; that special gift was scrapped after a police car parked nearby. To take advantage of exemptions allowing owners to walk their pets, one person in Romania took his fish on a walk, while a young woman put her cat in a bag to justify a trip to the mall.”

In the United States, Buzzfeed and BoredPanda have reported on an abundance of pandemic jokes and memes. Americans have watched Michigan’s Father Tim Pelc use a squirt gun of holy water to bless Easter baskets from a socially safe distance. We’ve also been alerted to the possibility of a baby boom that will yield Quaranteens in 2033 and endless rounds of toilet paper jokes.

Weekly Focus – Think About It

“The future belongs to those who believe in the beauty of their dreams.”
–Eleanor Roosevelt, Former First Lady, diplomat, and activist​

Best regards,

Jack Reutemann, Jr. CLU, CFP®

 

P.S.  Please feel free to forward this commentary to family, friends, or colleagues.

Most Popular Financial Stories

Memorial Day

Memorial Day

In honor of Memorial Day, we’d like to tell you a story about a man named Ben Salomon.Ben Salomon was a dentist. He went to school, got his degree, and started...

read more
Special Market Update

Special Market Update

First, I want to thank everyone for all the calls and emails. We are all doing great, and I hope all of you are safe and healthy. At the same time, I am humbled...

read more
Breaking down the CARES Act

Breaking down the CARES Act

How Are Your Investments Doing Lately?  Receive A Free, No-Obligation 2nd Opinion On Your Investment Portfolio > Our Mission Is To Create And Preserve Client Wealth...

read more
Emergency Special Market Update

Emergency Special Market Update

December 9, 2020 Our Mission Is To Create And Preserve Client Wealth How Are Your Investments Doing Lately?  Receive A Free, No-Obligation 2nd Opinion On Your Investment...

read more

Investment advice offered through Research Financial Strategies, a registered investment advisor.
* This newsletter and commentary expressed should not be construed as investment advice.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
* To unsubscribe from the Weekly Market Commentary please reply to this e-mail with “Unsubscribe” in the subject.

 

Investment advice offered through Research Financial Strategies, a registered investment advisor.

Sources:
https://www.economist.com/graphic-detail/2020/05/15/a-plague-on-jobs (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/05-18-20_TheEconomist-A_Plague_on_Jobs-Footnote_1.pdf)
https://www.cnbc.com/2020/05/15/us-retail-sales-april-2020.html
https://www.marketwatch.com/story/us-industrial-output-collapses-in-april-2020-05-15
https://www.barrons.com/articles/trade-wars-are-coming-thanks-to-the-coronavirus-to-fix-it-close-the-wealth-gap-51589575501?mod=hp_DAY_13 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/05-18-20_Barrons-Trade_Wars_are_Coming_Thanks_to_the_Coronavirus-To_Fix_It_Close_the_Wealth_Gap-Footnote_4.pdf)
https://fivethirtyeight.com/features/many-americans-are-getting-more-money-from-unemployment-than-they-were-from-their-jobs/
https://www.cbsnews.com/news/unemployment-claims-3-million-jobless-report-last-week/
https://www.barrons.com/market-data (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/05-18-20_Barrons-Market_Data-Footnote_7.pdf)
https://www.merriam-webster.com/dictionary/schadenfreude
https://www.merriam-webster.com/dictionary/wanderlust
https://www.merriam-webster.com/dictionary/weltschmerz
https://foreignpolicy.com/2020/05/09/coronavirus-pandemic-reopening-economy-life-after-lockdown/
https://www.boredpanda.com/quarantine-coronavirus-jokes/?utm_source=google&utm_medium=organic&utm_campaign=organic
https://www.buzzfeednews.com/article/olivianiland/priest-water-gun-meme-coronavirus?origin=shp
https://www.goodreads.com/author/quotes/44566.Eleanor_Roosevelt

Weekly Market Commentary 05/18/2020

Market Commentary – May 11, 2020

The stock market is not the economy.

It’s an important point to remember when headlines marvel that U.S. stock markets are moving higher while the U.S. economy is contracting. Stock markets are not mindful of the present moment. They are forward-looking, reflecting expectations about what will happen in the months and years to come, explained Mark Hulbert in a MarketWatch opinion piece.

In the present moment, the pandemic-induced recession is producing some brutal economic statistics. Lisa Beilfuss of Barron’s reported the unemployment rate rose to 14.7 percent last week. One-in-five Americans was out of work, and household income might be down 10 percent for the first six months of 2020.

No one is expecting great things from the economy in 2020. The Conference Board forecasts the U.S. economy will contract between 3.6 percent and 7.4 percent this year. However, the economy’s poor showing doesn’t mean stock markets will decline. John Rekenthaler of Morningstar explained:

“…neither employment statistics nor GDP [Gross Domestic Product] growth directly affect equity prices. The primary drivers are instead two sets of expectations: 1) future earnings and 2) future interest rates, with the latter being used to discount the former.”

Let’s consider earnings. There’s not a lot to celebrate in 2020, but the outlook for 2021 is positive. John Butters of FactSet reported, “Looking at future quarters, analysts predict a (year-over-year) decline in earnings in the second quarter (-40.6 percent), third quarter (-23.0 percent), and fourth quarter (-11.4 percent) of 2020. However, they also project a return to earnings growth in Q1 2021 (12.2 percent).”

The Federal Reserve is doing all it can to keep interest rates low. However, one of its most potent tools, the fed funds rate, has already been cut to near zero. Rekenthaler wrote:

“Government intervention is the new and updated version of “The Fed Put”: the idea that the Federal Reserve could always support equity prices, whenever it desired, by cutting short-term interest rates. Those rates are currently at zero, so that game can no longer be played. But the Federal Reserve can continue its newer technique of buying bonds in the open marketplace and flooding the banks with liquidity, and Congress can pass new stimulus bills…Whether such activity will benefit investors more than workers remains to be seen. Thus far, it has.”

Last week, the Standard & Poor’s 500 Index finished up 3.5 percent. The Dow Jones industrial Average gained 2.6 percent. The Nasdaq Composite rose almost 6 percent, putting it in positive territory year-to-date, according to Barron’s.

The better angels of our nature.
In his first inaugural address, President Abraham Lincoln urged unity, saying: “We are not enemies, but friends. We must not be enemies. Though passion may have strained it must not break our bonds of affection. The mystic chords of memory, stretching from every battlefield and patriot grave to every living heart and hearthstone all over this broad land, will yet swell the chorus of the Union, when again touched, as surely they will be, by the better angels of our nature.”

During the coronavirus crisis, we have seen remarkable generosity. From first responders manning the front lines, at significant personal risk, to companies and individuals taking actions that help others. Since the virus began to spread, news organizations have been sharing stories about generosity, innovation, and appreciation. Here are a few from Good News Network and The New York Times:

·        A grocery chain is paying to process and package raw milk donated by dairy farmers so the milk can be distributed through food banks and community organizations.

·        A Brooklyn landlord waived April rent for everyone living in 18 apartment buildings in an effort to ease tenants’ financial stress.
·        California partnered with the Federal Emergency Management Agency (FEMA) to create ‘Great Plates Delivered,’ which pays restaurants to deliver meals to eligible seniors.
·        The elusive street artist Banksy delivered a piece of art, featuring a new superhero – a nurse wearing a mask and a cape – to a British hospital with a thank you note.
·        A national hardware store chain bought flowers from nurseries and growers and had them delivered to moms quarantined in nursing homes on Mother’s Day.
·        Coronavirus survivors are sharing their blood so the antibodies they’ve developed can be used to save lives.

What acts of kindness and generosity have you seen, read, or heard about?

Weekly Focus – Think About It
“Always do what is right. It will gratify half of mankind and astound the other.”
–Mark Twain, Writer and humorist

 

Best regards,

Jack Reutemann, Jr. CLU, CFP®

 

P.S.  Please feel free to forward this commentary to family, friends, or colleagues.

Most Popular Financial Stories

Memorial Day

Memorial Day

In honor of Memorial Day, we’d like to tell you a story about a man named Ben Salomon.Ben Salomon was a dentist. He went to school, got his degree, and started...

read more
Special Market Update

Special Market Update

First, I want to thank everyone for all the calls and emails. We are all doing great, and I hope all of you are safe and healthy. At the same time, I am humbled...

read more
Breaking down the CARES Act

Breaking down the CARES Act

How Are Your Investments Doing Lately?  Receive A Free, No-Obligation 2nd Opinion On Your Investment Portfolio > Our Mission Is To Create And Preserve Client Wealth...

read more
Emergency Special Market Update

Emergency Special Market Update

December 9, 2020 Our Mission Is To Create And Preserve Client Wealth How Are Your Investments Doing Lately?  Receive A Free, No-Obligation 2nd Opinion On Your Investment...

read more

Investment advice offered through Research Financial Strategies, a registered investment advisor.
* This newsletter and commentary expressed should not be construed as investment advice.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
* To unsubscribe from the Weekly Market Commentary please reply to this e-mail with “Unsubscribe” in the subject.

 

Investment advice offered through Research Financial Strategies, a registered investment advisor.

Sources:
https://www.marketwatch.com/story/this-is-the-one-leading-economic-indicator-stock-investors-should-follow-2020-04-21
https://www.barrons.com/articles/u-s-stocks-could-face-a-reckoning-as-investors-grasp-economic-damage-51588978056?mod=hp_LEAD_2 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/05-11-20_Barrons-Joblessness_is_Soaring-Why_are_Stocks_Rising-Footnote_2.pdf)
https://www.conference-board.org/data/usforecast.cfm
https://www.morningstar.com/articles/982525/the-stock-market-is-not-the-economy
https://insight.factset.com/sp-500-earnings-season-update-may-8-2020
https://www.barrons.com/market-data (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/05-11-20_Barrons-Market_Data-Footnote_6.pdf)
https://avalon.law.yale.edu/19th_century/lincoln1.asp
https://www.goodnewsnetwork.org/kroger-buys-and-donates-50000-gallons-of-excess-milk-to-food-banks/
https://www.nytimes.com/2020/04/03/nyregion/coronavirus-nyc-landlord-mario-salerno.html
https://www.goodnewsnetwork.org/california-will-start-paying-restaurants-to-deliver-food-to-seniors-in-need/
https://www.goodnewsnetwork.org/banksy-superhero-nurse-hospital-artwork/
https://www.goodnewsnetwork.org/lowes-mothers-day-deliveries-in-2020/
https://www.nytimes.com/2020/04/13/learning/what-acts-of-kindness-have-you-heard-about-or-participated-in-during-coronavirus.html
https://www.goodreads.com/author/quotes/1244.Mark_Twain?page=2

Special Market Update

Special Market Update

First, I want to thank everyone for all the calls and emails. We are all doing great, and I hope all of you are safe and healthy. At the same time, I am humbled and embarrassed, for 99% of my industry now floats in a sea of red ink. But we are having our best year ever, THANKS to YOU!!! Holy Cow, who else can say that?  In the last 60 days we have brought in over $30 million of new Assets Under Management, all from referrals. Thank YOU, AGAIN!!!

Now for the details:  Here’s the latest on our moves and strategy. Since the virus erupted and started to do major damage to the markets, we used 3x leveraged ETFs both to profit from declines (SPXS) and from advances (SPXL). According to our best indicators, we have emerged from the “crisis mode,” which required us to be fast and furious with purchasing SPXS (to play a market decline) and SPXL (to play a market advance). These ETFs enabled us to make split-second moves.

Now we are back to what we call “best relative strength” sector and subsector investment selections. Sometime today the following trades will show in your account: we replaced SPXL with five, 18%, selections (the 18% allocation is relative to a 100% growth model, so you will have to adjust accordingly): VGT, XLG, XLY, XBI, IJK.  Additional details are provided below. Our goal is to avoid the really sick parts of the economy/stock market that may never return to January, 2020 levels, or, in the best case, in 3 to 5 years: autos, airlines, auto rentals, aerospace manufacturing, hotels, cruise lines, retail, restaurants, theme parks, etc. These are now the most suffering parts of our economy: most will never come back.

We have therefore had to surgically separate the stock market by purchasing sector and subsector winners and thus avoiding the losers. This approach is not 100% accurate: for example XLY is a top “RS”, relative strength,  performer, but it has DISNEY in it. That’s where it belongs, and we can’t do anything about it. The mouse is struggling at best, on life support for at least another 18 months.

That’s all for now.  As always, feel free to call me. We are here for you!!!

Jack  Reutemann
240 401 2355

 

Only read this if you like to understand the details or are a stock market nerd like me!

VGT, Analyst Report

VGT tracks a broad index of companies in the information technology sector which the company considers to be the following three areas; software, consulting, and hardware. As a result, this fund tracks some of the most crucial companies in the technology sector across a wide range of market cap levels. The fund focuses entirely on U.S. stocks, and is relatively top heavy; three securities make up 25% of the fund 54% of assets go to the top ten even though the fund holds over 425 securities in total. Investors should also note that this fund dedicates the majority of its assets to giant and large cap funds, meaning that it will be less volatile than some of the other products in the space that focus on relatively unproven companies and technologies. As a result, this fund will be more of a value play than one that presents strong growth opportunities. So while this is a decent fund for those looking to achieve broad exposure to the tech sector without the influence of semiconductors, most investors should look to broader fund which take into account all sectors of the technology industry instead for their portfolios.

XLG, Analyst Report

This ETF tracks the 50 largest securities, by market capitalization, in the Russell 3000 universe of U.S.-based equities. As a result, investors should think of this as a concentrated play on mega cap stocks in the American market. These securities are usually known as ‘Blue Chips’ and are some of the most famous and profitable companies in the country, including well known names such as ExxonMobil, Apple, IBM, and GE. The fund is probably one of the safest in the equity world as the companies on this list are very unlikely to go under unless there is an apocalyptic event in the economy. However, these securities are unlikely to grow very much either as they are already pretty large and have probably seen their quickest growing days in years past, but most do pay out solid dividends which should help to ease the pain of this realization. Overall, XLG is a decent choice for investors seeking broad mega cap exposure but most investors would probably be better served by investing in a broader fund that is a little more diversified.

XLY, Analyst Report

The ETF offers exposure to the consumer discretionary sector, making it an appealing option for investors looking to implement a sector rotation strategy or tilt exposure towards corners of the U.S. market that may perform well during a recovery. XLY offers impressive liquidity, cost efficiency, and depth of exposure, making it one of the best ETF options for playing the consumer discretionary sector.

XBI, Analyst Report

XBI is one of a handful of biotech ETFs available, offering exposure to a corner of the market that can perform well during periods of consolidation and is capable of big jumps in the event of major drug approvals. XBI focuses on a narrow sector of the health care sector, and as such is probably too precise for most investors seeking to construct a long-term portfolio. However, this ETF can be useful for those seeking to fine tune exposure or for those bullish on the sector over the long run. XBI focuses exclusively on American stocks, and primarily consists of mid cap and small cap securities. XBI’s portfolio is somewhat limited, though the equal-weighted methodology of the underlying index ensures that assets are balanced across all components. That feature can be particularly important in the biotech space, where specific companies are capable of turning in big gains over short periods of time.

IJK, Analyst Report

This ETF offers exposure to mid cap stocks that exhibit growth characteristics, making IJK a potentially useful tool for investors looking to fine tune their domestic equity exposure or implement a tilt towards a specific investment style.

TQQQ, we continue to hold this position, as it is a very efficient way to own 3X the QQQ: 
Analyst Report

This ETF offers exposure to one of the world’s most widely-followed equity benchmarks, the NASDAQ, and has become one of the most popular exchange-traded products. The significant average daily trading volumes reflect that QQQ is widely used as a trading vehicle, and less as a components of a balanced long-term strategy. Of course, this fund can certainly be useful as part of a buy-and-hold approach for investors looking to maintain a tilt towards the potentially volatile tech sector.

Most Popular Financial Stories

Memorial Day

Memorial Day

In honor of Memorial Day, we’d like to tell you a story about a man named Ben Salomon.Ben Salomon was a dentist. He went to school, got his degree, and started...

read more
Special Market Update

Special Market Update

First, I want to thank everyone for all the calls and emails. We are all doing great, and I hope all of you are safe and healthy. At the same time, I am humbled...

read more
Breaking down the CARES Act

Breaking down the CARES Act

How Are Your Investments Doing Lately?  Receive A Free, No-Obligation 2nd Opinion On Your Investment Portfolio > Our Mission Is To Create And Preserve Client Wealth...

read more
Emergency Special Market Update

Emergency Special Market Update

December 9, 2020 Our Mission Is To Create And Preserve Client Wealth How Are Your Investments Doing Lately?  Receive A Free, No-Obligation 2nd Opinion On Your Investment...

read more

Weekly Financial Market Commentary

December 9, 2020

Our Mission Is To Create And Preserve Client Wealth

Most Popular Financial Stories

Memorial Day

Memorial Day

In honor of Memorial Day, we’d like to tell you a story about a man named Ben Salomon.Ben Salomon was a dentist. He went to school, got his degree, and started...

read more
Special Market Update

Special Market Update

First, I want to thank everyone for all the calls and emails. We are all doing great, and I hope all of you are safe and healthy. At the same time, I am humbled...

read more
Breaking down the CARES Act

Breaking down the CARES Act

How Are Your Investments Doing Lately?  Receive A Free, No-Obligation 2nd Opinion On Your Investment Portfolio > Our Mission Is To Create And Preserve Client Wealth...

read more
Emergency Special Market Update

Emergency Special Market Update

December 9, 2020 Our Mission Is To Create And Preserve Client Wealth How Are Your Investments Doing Lately?  Receive A Free, No-Obligation 2nd Opinion On Your Investment...

read more

Investment advice offered through Research Financial Strategies, a registered investment advisor.
* This newsletter and commentary expressed should not be construed as investment advice.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
* To unsubscribe from the Weekly Market Commentary please reply to this e-mail with “Unsubscribe” in the subject.

 

Investment advice offered through Research Financial Strategies, a registered investment advisor.

LinkedIn
Share
RSS
6Lc_psgUAAAAAA9c7MediJBuq3wAxIyxDSt73c9j