Lessons from a Haircut & Prayer Gathering
As I recently approached the local Supercuts, I wasn’t exactly sure how things were going to flow. I have not had a “professional” haircut since February, however, my dear nephew Zach has been doing a great job in the meantime.
The door to the store was open, but, I could not see anyone sitting for a haircut or walking around for that matter. Shortly after I walked in, a gal from the back came to greet me to take my temperature. I said no problem and we went on our way. I sat down and asked if I needed to keep my mask on for the duration of the cut, she said yes. No problem..on we go.
As we began talking, I asked how her family was and what they had been doing over the last few months. Like many, they have been filling their days with walks and putting on some extra weight from all the grubbin! She shared some of her financial fears of not being busy, but also spoke of her intent to enjoy every stage of the journey.
I went on to ask how long they had been open. Just 3 weeks was the answer. I asked if they had been progressively getting busier. “Not yet” was her response. The mood in the store was somber, yet, hopeful words began to flow from her!
I realized during my experience that this gal’s story may be entirely different than another professional in New York, Chicago or a boutique shop in downtown Carlsbad. Depending on which news source you watch, you may get two completely different views on the economic happenings around the world. One source may say: “The economy is opening nicely and we should be back to peak production in 2 years”. Another may say: “The economy is headed back into depression type conditions and we are in big trouble”. My take? The economy will take some time to repair, but, we are not heading into another depression. Certain industries will, and, have been hurt more than others. I believe optimism and the creative, God-given talents within individuals and businesses will prevail. Innovation will emerge. Professionals will adapt and potentially find a new career. This, no matter who gets elected come November. In the meantime, talk with people and hear their stories. We can learn a lot about the economy, but more importantly, we can learn a lot about people.
With racial injustice in focus and all that has transpired, I felt compelled to get involved somehow. One of my dear friends, a local African American Pastor, organized a prayer gathering on the beach early in the month of June. The intent was not to protest or be a problem for local authorities, rather to gather as a unified body and pray. There were probably 200 people that showed up, many different races. All were asked to wear masks and be respectful of current recommendations. Different leaders stood up to share, then we sat in prayer over specific issues. We heard first hand from an African American leader sharing the horrors of being treated unfairly, spit on and beat up as a kid because he was black. We heard from a local black missionary who was stopped by a police officer asking him “what are you doing in this neighborhood” at 6pm while on a jog. These things are not o.k. It was a time to acknowledge oppression. It was a time to be hopeful as well. We prayed for racial injustice to stop and wisdom on how to move forward in action, creating real change. We prayed for our government officials, for police departments and those serving and risking their lives each day. Not all are bad. It’s not good to miss the beauty of the forest because of a few bad trees. With that in mind, things can change. I don’t have the answers, but am hopeful for better days ahead. All this to say, it grows more evident to me each day that we ought not put our HOPE in the government, our health, our bank accounts, accomplishments or even our relationships. All will let us down along life’s journey. It’s an important question for all of us to be asking ourselves these days: “To whom do we place our HOPE?!”
Life is complicated, no doubt. Having a plan and adjusting along the way seems to be much of life’s journey. So also, the Financial Journey!
Investment Management and Financial Planning is what we love to do. To our valued clients, thank you for your trust and business. If you are not a client already, please be sure to inquire and see if we can be of service.
Lastly, be sure to tune into my upcoming videos!
Positive Quote:
"We must accept finite disappointment, but never lose infinite hope.”
- Martin Luther King
Fun Fact:
The first iPhone wasn’t made by Apple.
The Markets
Second Quarter (through June 30, 2020)
Stocks rebounded from a dismal March by posting their best monthly returns since 1987, as investors were encouraged by the expectation of additional government stimulus programs and hope that the economy would be reopening soon. The Paycheck Protection Program and Health Care Enhancement Act replenished the Paycheck Protection Program, providing funding for additional small business loans, and offered financial support to hospitals, while increasing the availability of more virus testing. The Federal Reserve added trillions of dollars in funds to its lending programs. Crude oil prices rose nearly 30.0% despite collapsing into negative territory on April 20. A few states began easing lockdown restrictions and reopening a range of businesses. While there were plenty of ups and downs in the market during the month, April closed with each of the benchmark indexes listed here climbing notably higher. The Nasdaq gained 15.45%, followed by the Russell 2000, the S&P 500, the Dow, and the Global Dow.In May, investors continued to rally to stocks as more states and foreign countries eased restrictions put in place in response to the COVID-19 pandemic. The economy continued to stagger, however. The unemployment rate reached its highest level since the Great Depression while claims for unemployment insurance pushed past 25 million. On the other hand, news of possible breakthroughs in the treatment of COVID-19 cases and the development of a vaccine for the virus provided optimism for investors. Once again, the Nasdaq led the way, advancing 6.75% by the close of May. The Russell 2000 gained 6.36%, followed by the S&P 500, the Dow, and the Global Dow.
June was a month of drastic highs and lows for stocks. For example, the Dow climbed 6.8% in the first week of the month, then fell 5.5% in the second week. However, by the close of June, each of the indexes listed here posted gains with the tech holdings of the Nasdaq leading the way, up nearly 6.0% from its May closing value.
The second quarter of 2020 notched the best quarterly performance since 1998, with each of the benchmark indexes making sizeable gains over their historically poor first-quarter tallies. However, much of the second-quarter growth in the stock market and economy is more of a bounce back from a dismal March and April, when pandemic-related lockdowns and restrictions virtually shut down the economy. Nevertheless, stocks rose as investors focused on favorable economic data and the possibility of further government stimulus, despite rising virus cases and tepid trade relations with China. Of the benchmark indexes listed here, the Nasdaq again proved the strongest, soaring more than 30.0% for the quarter, followed by the small caps of the Russell 2000, which gained 25.0%. The large caps of the S&P 500 and the Dow closed the second quarter up nearly 20.0% while the Global Dow vaulted ahead by more than 14.0%.
Year to date, the Nasdaq remains the only index well ahead of its 2019 year-end closing value. While still in the red, the S&P 500 is within 5.0 percentage points of last year's final mark, followed by the Dow, the Global Dow, and the Russell 2000.
By the close of trading on June 30, the price of crude oil (WTI) continued to climb, closing at $39.35 per barrel, ahead of the May 29 price of $35.34 per barrel. The national average retail regular gasoline price was $2.129 per gallon on June 22, up from the May 25 selling price of $1.960 but $0.525 less than a year ago. The price of gold finished June at $1,798.80 per ounce, slightly higher than its May 29 closing value of $1,745.80 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.
Eye on the Month Ahead
While the stock market has pushed forward, indicators did not suggest the economy is on the upswing. As states ease restrictions and businesses reopen, the economy should begin the slow process of recovery. However, increases in the number of reported virus cases may prompt the imposition of restrictions, at least in some states, which could impact economic growth.
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 leading 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.
