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Market & Portfolio Review: 5-27-21

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It’s All About the Money Flow

Over the last decade, the emergence of cloud computing, e-commerce, and the digital revolution powered a dominant move in technology and communication stocks that allowed the sector to capture an increasingly larger share of investor fund flows. As the rate of change in growth for technology slows, we believe investors are beginning to search for other areas of the stock market that may offer a more attractive home for their money.

In this week’s market update, we discuss which areas of the stock market are potential recipients of technology dollars and how the direction of the U.S. dollar and 10-year U.S. interest rates offer clues to where those dollars may flow. Second, we will assess the state of implied volatility and how its direction ultimately influences the asset allocation decisions of large institutional investors. Lastly, we will wrap everything up with a quick health check on the credit markets and what that tells us about the sustainability of the current stock market rally.

Key Takeaways

  1. The U.S. Dollar is breaking down and the yield curve is steepening buy commodities, industrials, and bank stocks
  2. VIX is busted → buy dips in the market 
  3. Sell rallies in technology as higher long term rates compress multiples

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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