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Back Again

Back Again

July 17, 2020

Thought I would give everyone a bit of a break from my e-mails. Hard to believe we are over halfway through the year and what a year its been. Some of you may be asking, “what’s next?”  Here are my “second half predictions.”

As far as the pandemic is concerned, I think most people would agree that, not even the so-call experts know, and like the common flu, this thing is just going to have to run it course. Without a vaccine, there will be some industries that will be lucky to see any form of normalcy. The “feeling” of not knowing will only contribute to election year volatility.

Speaking of elections, in case you haven’t heard, there’s one coming and thanks to the news, you will be reminded of it hourly. History has shown that elections do have short-term implications, like added volatility. Yet, the long-term impact of either party being elected tends to be muted at best. So, for traders, trade away. For investors, own quality and hold quality. 

Speaking of quality, now may not be the best time to simply buy an index. It doesn’t take a noble winning economist to reason that companies probably don’t have the profitability they did eight to twelve months ago. Which begs the question, “Why is the market where it is today?” Most of the heavy lifting to boost the market is being done by a few names, and the fed now seems to be a regular and active market influencer. Simply put, own quality companies and investments. The headline, “What you should do with your money now,” is click bate.

Finally, the phase, “Lower for longer,” as it pertains to bond yields is being reinforced. There is no sign of rates climbing anytime soon. This continues to be a real challenge for all those wanting the relative safety and income from bonds. If you are someone looking for regular income from your investments, it’s time to explore something other than the traditional bond ladder.

As I have said many times over the past two years, “financial markets haven’t changed, but the environment in which they exist has.” The new normal is more than masks and social distancing.

The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change with or without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.