Can I Climb That Rock?
In a recent trip to Sedona, Arizona, the possibility of climbing various rock formations captured my thoughts on many occasions. I remember looking between rock and through canyons wondering what it would be like to get into some of those “spots”. Fortunately, our 3 boys were with us which prevented an attempt at some of the higher climbs! They very well could have saved me from a climbing accident. To note, the boys did incredible on the many hikes we did, including, vistas and secret caves high up on the terrain!
It certainly feels like 2020 has been a never-ending mountain climb at times. I suspect many Americans and people around the world feel like they are standing at the base of a mountain, looking up. Not knowing if it would be possible to get to the top. Not knowing how to even get started. Feeling alone, angry and depressed at the proposition of just standing there and not knowing what to do.
In addition to the many lives lost due to COVID-19, the CDC reports significantly higher rates of anxiety, depression, suicide, increased drug & alcohol use and overdoses. The list goes on. Social unrest, racial injustice, conspiracy theories galore. Blue blaming Red, and Red, blue. Prior to the election, I read something I enjoyed. Here you go:
“After the elections are over, your neighbors will still be your neighbors. Trump won’t be there to ring up your groceries; your neighbors will. Biden won’t be there to fix your car or help you out with yard work; your neighbors will. Both Trump and Biden will still be in their wealthy political world, and we’ll be in ours. They’ll both be doing their thing, while you and I live together, work together, learn together, shop together, eat together, worship together, and pump our gas next to one another. We are what makes America great. We are the ones who choose to be decent, loving, caring, and compassionate human beings. Vote for whomever you choose to vote for in November, but remember…We, the people choose to shape our communities. Not them.”
Last night I took my trash out and found my neighbor limping about. We spoke for a minute and I asked if I could pray for him. We’ve never had a “spiritual” conversation in the 5 years I’ve known him. When I asked, he sighed in relief. I knelt down in his driveway and prayed for the man. Afterwards he said: “that was thoughtful of you, thank you”. For a moment I suspect he didn’t feel alone in his struggle. I was with him, listening with an empathetic heart. I’m no saint, just living out the reality of the quote above. That same man loves seeing our boys, always asking how they are doing. He is decent, kind and caring, despite our differences.
Financially, many have felt the effects of COVID as well. Some have lost jobs, businesses and their financial security. Additionally, I’ve seen some pretty nasty markets over the last 16 years as an Advisor and the initial selling in March 2020 was pretty bad! I can recall several conversations with clients in March & April where many were feeling alone at the base of the mountain. Wondering if they’d be able to “get through” another recession. Well, we are! It’s not always easy staying optimistic with doomsday media outlets shoving pessimistic outlooks into our reach. I’m pretty practical by nature and do not want to pretend that things are peachy king when they are not. However, as it relates to investment and financial planning, optimism is the only way to go. Wealth is built over time. Financial peace comes from proper, ongoing planning. These things we can do regardless of recessions, who is in office or what one’s opinions are about how big a stimulus package should be. It’s imperative to remain optimistic and forward looking. It’s how hard-working people have accumulated wealth and met their financial goals over time.
2020 has been one of the greatest challenges, and, opportunities to lead in my 16-year career. What a privilege it is to serve you. Thank you for the trust and confidence in allowing us to help guide you through a most challenging year. Remember you’re not alone at the base of the mountain. It’s a joy to climb with you. Stay optimistic and hopeful, my friends.
Positive Quote:
"If you want to be led, start moving.”
- Christian De Manielle
Fun Fact:
My wife is homeschooling our three boys!
The Markets
Third Quarter (through September 30, 2020)
July kicked off the third quarter with a bang as stocks surged throughout much of the month. Investors were encouraged by solid employment growth, a rise in personal income and consumer spending, a surge in the housing sector, and an increase in industrial production. All news was not positive, however. The second-quarter gross domestic product fell more than 31% and many states saw an increase in the number of reported COVID-19 cases. Nevertheless, investors stayed with equities, pushing values higher for the fourth consecutive month. Tech stocks drove the Nasdaq to a 6.8% gain, followed by the S&P 500 (5.5%), the Global Dow (3.5%), the small caps of the Russell 2000 (2.7%), and the Dow (2.4%). Treasury bond prices climbed, sending yields lower in July. Crude oil prices settled at $40.40 per barrel, nearly $1.00 ahead of their June closing values. Gold prices closed July at $1,990.00, about 11% higher than June's closing price.
The positive run for stocks continued in August, as each of the benchmark indexes listed here advanced notably. The Nasdaq climbed nearly 9.6%, the Dow rose 7.6%, the S&P 500 advanced 7.0%, the Global Dow vaulted 6.0%, and the Russell 2000 gained 5.5%. Crude oil and gas prices rose marginally, while the price of gold fell. Throughout the month, states struggled to settle on appropriate protocols for reopening schools. Testing for the virus increased, and the number of reported COVID-19 cases and deaths rose.
September saw stocks fall on waning hopes of a second round of stimulus. Also, discord between the United States and China ramped up following President Trump's threatened recourse against American companies that create jobs overseas or that do business with China. Technology shares took a sizable hit, particularly early in the month. September saw several days of favorable returns, likely due to bargain hunters. Unfortunately, there wasn't enough buyers to prevent the benchmark indexes from falling lower by the end of each week of the month. September saw each of the indexes fall, led by the Nasdaq (-5.2%), followed by the Global Dow (-4.3%), the S&P 500 (-3.92%), the Russell 2000 (-3.45%), and the Dow (-2.28%).
Overall, the third quarter of 2020 produced the second consecutive quarter of notable market gains. Of the benchmark indexes listed here, the Nasdaq again proved the strongest, climbing more than 11.0% for the quarter, followed by the large caps of the S&P 500 and the Dow, which gained 8.5% and 7.6%, respectively. The Global Dow advanced 5.0% for the quarter, and the small caps of the Russell 2000 ended the quarter up 4.6%.
Year to date, the Nasdaq remains well ahead of its 2019 year-end closing value, while the S&P 500 is more than 4.0% over last year's closing mark. The remaining benchmarks continue to gain ground, with the closest to its year-end value being the Dow, followed by the Global Dow and the Russell 2000.
By the close of trading on September 30, the price of crude oil (CL=F) closed at $39.64 per barrel, below the August 31 price of $42.81 per barrel and slightly higher than the June 30 price of $39.35. The national average retail regular gasoline price was $2.169 per gallon on September 28, down from the August 31 price of $2.222 and lower than the June 28 selling price of $2.174. The price of gold finished September at $1,891.80 per ounce, lower than the August 31 price of $1,940.60 per ounce but higher than its June 30 closing value of $1,798.80 per ounce.
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
Data sources: Contribution provided by Forefield. Economic: Based on data from U.S. Bureau of Labor Statistics (unemployment, inflation); U.S. Department of Commerce (GDP, corporate profits, retail sales, housing); S&P/Case-Shiller 20-City Composite Index (home prices); Institute for Supply Management (manufacturing/services). Performance: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI, Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). News items are based on reports from multiple commonly available international news sources (i.e., wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 largest, publicly traded companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. The U.S. Dollar Index is a geometrically weighted index of the value of the U.S. dollar relative to six foreign currencies. Market indices listed are unmanaged and are not available for direct investment.
I look forward to continuing to guide clients through 2020 and beyond. If you have a friend or family member that you think would benefit from working with me, please don’t hesitate to make the introduction. Thank you for your trust and business.
