Broker Check

Presidio Wealth Management Market Commentary 08/25/2020

August 25, 2020
Happy Tuesday everyone! To say that the market comeback has been spectacular would be understated. Nearly five months after the stock market low on March 23rd, investors have shrugged off concerns about the sharpest economic contraction since the Great Depression and have bid up stocks to near all-time highs.
The 55% rally from the market bottom to current represents one of the fastest bear market recoveries in history. The only faster one on record was in 1982, when the S&P 500 made a full recovery in just three months.
The chart below from Bespoke charts the market since last December highlighting what is now a four-act bull market. Act I was the strongest and led by tech, health care and energy stocks. Act II saw huge gains from "re-open" plays as the first wave of COVID subsided. Act III saw sideways action for the broad market but big gains from tech giants like Facebook, Apple, Amazon, Netflix and Google as COVID cases began to rise again. And finally, Act IV has been led once again by re-open stocks in industrial, transport and financial stocks, while the tech sector and "COVID Economy" stocks have taken a breather.
Many of you may recall the famous 1996 fight between Evander Holyfield and Mike Tyson. Holyfield was known for his impeccable planning and preparation going into the fight. When Tyson was asked by a reporter whether he was worried about Holyfield and his fight plan he answered: "Everyone has a plan until they get punched in the mouth." The important thing to note is how we react after getting punched in the mouth.
Holyfield did get punched in the face, but he stuck to his strategy and ended up knocking Tyson out in the 11th round.
The COVID driven sell off in stocks from February 19th to March 23rd brought trepidation to all of us, and it may have felt like we were punched in the face. When there is great uncertainty and worry like we feel today it is important to stick to the game plan for a successful outcome. We spend a great deal of time in the beginning of a new client relationship evaluating the risk tolerance and suitability of an investment strategy. If expectations are set upfront and based upon a solid foundation, clients should have the fortitude to ride out the volatility.
The picture below from Fidelity highlights the financial devastation that can be caused by not sticking to a well thought out investment strategy.
It is normal to feel anxiety over the current market volatility. We are here to help! Please reach out to our office if you need to discuss your financial situation.
Parker Christiansen
CEO / Wealth Advisor
Presidio Wealth Management
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Important Disclosures:
Securities offered through Triad Advisors, member FINRA/SIPC. Investment advice offered through Resources Investment Advisors, Inc., an SEC-registered investment adviser. Resources Investment Advisors, Inc., and Presidio Wealth Management are not affiliated with Triad Advisors. This email and any attachment are solely for the use of the intended recipient (or an authorized agent of the intended recipient). This communication may contain information that is proprietary, privileged, confidential or otherwise legally exempt from disclosure. If you have received this email by mistake, you are not authorized to read, print, retain copy of disseminate it or any attachment. Please notify the sender by reply email and delete this message and any attachments from your computer system.
Investment advice offered through Resources Investment Advisors, an SEC-registered investment adviser. This article is intended to be a general commentary on market conditions and is not investment advice. Every individual's situation is different. Therefore, if you would like individualized advice for your situation, please contact us.
To ensure compliance with applicable Internal Revenue Service regulations, any tax advice contained in the email was not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.
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