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Market & Portfolio Review: 06-16-20

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Early Stage Refueling

Despite a strong move off the March 23rd low, our data suggests that we are still in the early innings of this stock market recovery. In fact, the 44% upward advance in stock prices, prior to last week’s brief 6-7% pullback, was in line with the initial 2009 stock market recovery of 43.4%. Those investors that invested after missing the first stage of the 2009 stock market recovery enjoyed a 4-year forward return on the S&P 500 of +105.72%.

The only difference between today and June of 2009 is that the supply of money cheap money is exponentially higher, inflation is lower, and the individual companies we are focused on are healthier. Based on that data, do you think stocks will move higher or lower? We suspect the path is materially higher.

In today’s market review, we are going to review recent COVID-19 data after concerns over a second wave began to emerge last week, and what that could mean for the stock market and overall asset allocation. Just as important, we are going to measure how investors are positioned in the market and whether that positioning reflects fear over a second wave or a strong economic recovery. Second, we are going to review the surprisingly strong retail sales number and what that means for the prospects of a V-shaped economic recovery and overall portfolio construction.

Additionally, we will measure the health of the current market bounce by assessing the sponsorship of the current stock market rally and whether expanding breadth is a sign of exhaustion or long term stock market durability and health. Lastly, we are going to review the types of companies that have been outperforming in the stock market over the past 3-6 months, why they are outperforming, and then compare those characteristics to those companies that currently dominate our investment strategies.

The information here is presented by licensed professionals and not specific to any individual’s personal circumstances. Investment advisory services offered through LifePro Asset Management, LLC, a registered investment adviser. Investments involve risk and are not guaranteed. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy will be profitable or equal any historical performance. Discussion of any specific stocks are based on objective, non-performance criteria and such discussion neither serves as a recommendation nor as the receipt of, or a substitute for, personalized advice. Due to various factors, including changing market conditions, such discussion of positions and/or recommendations may no longer be reflective of current position(s) and/or recommendation(s). Moreover, no client or prospective client should assume that any such discussion serves as the receipt of, or a substitute for, personalized advice from Advisor, or from any other investment professional. Forward-looking statements such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” are based on management’s views and assumptions at the time such statements were originally made and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. LifePro Asset Management does not undertake any obligation to correct or update any forward-looking statements on the LPAM Site.

Robert Reaburn

Robert Reaburn

Robert Reaburn is the Executive Vice President and Head of Wealth Management at LifePro Asset Management. He works with financial advisors building diverse financial portfolios that best empower their clients with a lifetime of financial security.

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