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Market & Portfolio Review: 5-7-21

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The Big Shift

Every secular growth cycle has a beginning, a rise, and an eventual decline, as the baton is passed off to the next set of secular growth leaders. Over the past decade, secular market leadership has been dominated by leading internet and software companies, while oil and gas, copper, and iron ore companies have been afterthoughts across the American investment landscape. For the first time in over a decade, there is mounting evidence that market leadership may be reverting away from technology and back toward the commodity landscape.

An accelerating economy combined with a dearth of investment in the commodity space over the past 10 years means that your traditional supply response to rising demand is noticeably absent. As a result, for companies with permits in place and wells that are already producing, the commodity price environment may lead to rising sales, expanding margins, and accelerating free cash flow. In this week’s market update, we discuss the big shifts we are making in the portfolio to reflect this emerging dynamic.

Key Takeaways

  1. Falling COVID case counts are leading to a rapidly recovering U.S. economy
  2. Rising demand, stale supply, OPEC discipline, and a lack of investment interest are an attractive backdrop for energy stocks
  3. The Nasdaq and other growth stocks are exhibiting generational top-patterns while the reverse appears to be the case for energy and materials

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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