We’re experiencing crazy times in the market

Never in our thirty-plus years in business have we ever experienced such volatility in the stock market accompanied by the economic dislocation as a result of the health pandemic and the more recent, justifiable protests across the United States.

However, what is most perplexing and the reason why we have always been proponents of allocating assets according to the objectives of the client is the Phoenix-like rise by equity prices off the March twentythird bottom.

In fact, there may be more gains ahead because as of this past Tuesday the S&P 500 had risen 37.7% off the low noted above and in so doing, according to LPL Research, marked its great fifty day rally ever for that index which dates back to 1957. All seven of the rallies that trailed this one saw market gains over the following six and twelve months. In addition, five of the seven previous rallies resulted in gains over the following month.

Sounds peachy? Not so fast. Despite the impressive and unexpected gain in nonfarm payrolls reported by the Labor Department this morning, we are a bit concerned that the market has run a bit too far too fast and would caution readers to take a step back make certain that your portfolio is appropriately balanced for what may be a choppy period ahead.

On to another topic.

Life is a series of moving targets. No matter what business you are in, things are always evolving and changing sometimes violently and frighteningly. Life is like that. Doctors take our symptoms on an Ipad. Toll takers are bordering on extinction thanks to EZ pass. Texts, emails and Facebook make it seem like we are living our neighbors’ lives as much as are own. The investment world is no different. Over the past year investors have had to deal with the tariff War, a health pandemic and civil unrest. Wall Street has been on pins and needles, worrying what disaster might lay around the next corner and some advisors have pulled their clients completely out of the market and so doing, compromised their financial well-being.

Fortunately, we had great parents that imparted wisdom into our often objecting minds. Such wisdom has helped us through these tumultuous times, both personally and professionally.

“Take a deep breath” is what they often advised. Good advice for those dependent on oxygen for life but when you think about it, it just makes sense. Taking a deep breath gives you time to think and frequently decisions can become clearer over time. Oftentimes, your first reaction when buying and selling investments can be correct BUT frequently the proper course in financial matters and life become clearer when you mull it over.

We also labored under the cardinal rule of “neither a borrower nor a lender be.” Helpful, when as kids you are penniless and unable to let anyone borrow anything. However, we did end up with a good work ethics as we were forced to get paper routes, cut lawns and babysit. Fagan Associates also lives by that rule as we believe that margin accounts are dangerous and that the ownership of stock will provide sufficient long term returns to meet your needs without the use of leverage.

Last, but certainly not least, a recent post from my private Facebook page is the following. “I like to think I am a thoughtful, reflective (older) person. Regardless, I heard somebody say that the ‘ whole world is a mess.’ I disagree. Martin Luther King once said, ‘ the arc of the universe is long, but it bends toward justice.’ Always has. Always will. I love all. Respect all. Care for all. But didn’t do enough for all. That will change.”

Take care. Be well. Stay safe.

Please note that all data is for general information purposes only and not meant as specific recommendations. The opinions of the authors are not a recommendation to buy or sell the stock, bond market or any security contained therein. Securities contain risks and fluctuations in principal will occur. Please research any investment thoroughly prior to committing money or consult with your financial advisor. Please note that Fagan Associates, Inc. or related persons buy or sell for itself securities that it also recommends to clients. Consult with your financial advisor prior to making any changes to your portfolio. To contact Fagan Associates, Please call 518-2791044.