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Retirement Capital Strategies
  • Getting Started
  • Testimonials
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    • About Us
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    • Managing Your Wealth
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  • Talk Money with Tom
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  • June 18, 2021

Market Update: June 18, 2021 How To Use Today’s Market Action To Our Advantage

Disclaimer - Read More

Tom Vaughan is a Certified Portfolio Manager and CEO of Retirement Capital Strategies. Retirement Capital Strategies is a registered investment advisor located in San Jose, California.

The opinions voiced in these presentations are for general information only and are not intended to provide specific advice or recommendations for any individual(s). The information provided herein is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Statements and opinions are subject to change without notice. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Accordingly, you should not rely solely on the information contained in these materials in making any investment decision as the material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned in this presentation. Before acting on information discussed in this presentation, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment advisor. Prospectuses, investment objectives, risks, charges and expenses of any investment product should be reviewed carefully before investing. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Retirement Capital Strategies and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Tom Vaughan or Retirement Capital Strategies unless a client service agreement is in place. “Likes” are not intended to be endorsements of our firm, our advisors or our services. Please be aware that while we monitor comments and “likes” left on this page, we do not endorse or necessarily share the same opinions expressed by site users. While we appreciate your comments and feedback please be aware that any form of testimony from current or past clients about their experience with our firm is strictly forbidden under current securities laws. Please honor our request to limit your posts to industry-related educational information, comments and questions. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation. Investment positions mentioned in these videos may be held in some of our existing portfolios. Tom Vaughan and Retirement Capital Strategies are unaffiliated and separate from those companies whose investment positions are mentioned and is not liable for their products or services.

By participating in any of these live streams, you agree that any questions submitted by you might be used by us in the future on this YouTube channel. We will not share your personal information.

If you have questions, please write to us at: asktom@talkmoneywithtom.com.

  • MoneyGuidePro®
  • Advent Software/Black Diamond Reporting
  • Riskalyze, Inc.
  • thinkpipes®
  • Right Capital
  • YCharts, Inc.

Transcript:

Tom Vaughan:

Well, hello, everybody, welcome to Friday. Well, unfortunately, today, the S&P 500 was down 1.3%. Lots of red on the board, but before you get too concerned, even though it was a bit of a rough week, now, there’s some really interesting things that are happening that I think are quite good.


So first of all, today was Quadruple Witching Friday, which just means that this particular Friday, you have all kinds of things that are expiring: futures contracts, and options, and etc. And very often on a day like today, you’ll see a lot of volatility in lots of times the market is down on these days, as people sell their positions and close things out. And usually it does not result in a trend or continuation of situation, in terms of what we might see next week. The rest of what we saw this week, with basically from Wednesday on after Chairman Powell spoke, you know, again, the important information that happened there was that they decided or they indicated that they might be increasing interest rates a couple of times in 2023, and this was somewhat of a shock compared to what they talked about before. And so what has happened though is very fascinating. So normally, when they raise interest rates, or even talk about raising interest rates, that’s because they see some type of an inflationary event, and you’ll often see the bond market start to increase the yield on the bonds in response to what the Federal Reserve is seeing.


We have seen just the opposite, the bond yield has been coming down. And again, this just kind of emphasizes that this is not a normal situation. What is happening here, of course, is this reopening from the pandemic. And the bond market has already come up a lot, from last August, because of the fear of inflation. So, when the Federal Reserve came out and talked about the abilities to possibly raise some rates in the future, and eventually cut back on some of their bond buying, the markets actually, on the bond side, responded positively to that and actually dropped the yield, and what they’re looking at is that if the Federal Reserve starts to fight inflation, they’ve been very effective at it. And I think that the bond market really wanted to hear that from the Federal Reserve, that they’re not going to let it run too far, and that they’re not going to let it get away from them. Which I think is the biggest concern really, of the markets in general, both bond and stock market.


And so here, we have a situation though, that since they’ve announced that we’ve kind of had a very soft market and a down market, and what have you, and we’ve had all of these pieces sell off. And so I think though, if you really look at it, when the bond market yield comes down, you often see a pretty good stock market come, because again, the bond market competes with the stock market. And when it’s paying less of a yield, than the stock market starts to look better. And so it also makes for a situation where growth stocks can do quite well, and that’s definitely what we’ve seen. So, we’ve had this battle this year, back and forth, back and forth between growth and value.


So what we’ve done we actually made quite a few changes to the portfolio this week, and a couple last week also, and all of them are kind of the same concept. We’re moving some of the value pieces that we have to two main areas. One, is kind of that growth side to kind of create a balance between the value and the growth, and the other is just the broad market, buying the VTI, which is the total stock market, or VOO, which is the S&P 500. So we’ve increased our positions in those broad market arenas, quite drastically. And the reason is, because we’re going to continue to have this kind of back and forth between growth and value that we’ve been having all year, you’re better off owning the whole thing in that regard, as far as that goes.

Especially if growth is going to do well, because growth does drive the major indexes the broad markets a bit more, because the bigger companies are generally growth companies, the Apples, the Microsofts, and the Googles, and such as far as that goes. Are some of the big drivers, and they’ve been doing a lot better in this environment on a relative basis. So, I think portfolio-wise, we’ve got a good positioning. I’m not worried about the market, this is a great opportunity to see what might be doing, holding up better. So, for example, we’ve been buying some innovative technology which have been holding up better, we’ve been buying real estate, which has been holding up better, we’ve been buying the Clean Energy piece that held up better and cybersecurity, which we just bought yesterday.


So those pieces all did better than the total stock market did today are very close, to what the total stock market did today, so. This is an opportunity to buy and to stay in, because one of the keys that always interests me is that every time they talk about raising rates, the market It starts to come down, but the reason they’re raising rates is because economy’s doing so well. And eventually, the earnings start to come out, and they’re really good, which I would expect to see again, when they start to come out for this quarter. And then the market really starts to respond to that it starts to move up, so.

I think that’s exactly the pattern we’re looking at here. The markets coming down as they’re talking about raising rates. And then as earnings come out, we should see some some movement to the positive side, so. I don’t see anything here, that is a really significant situation, where we’re going to end up with a 20% or 30% or 40% downturn. We’re just having some volatility. The total stock market index is down, a little over 1% for the, for the week. And so, that’s not a big deal, as far as that goes, we’ll see how this goes. And we’ll keep we’ll keep watching and such too.


But anyway, I want to thank everybody who came for go with Tom, really, really fun today, thank you for coming. Again, we’ll be posting that on our channel. And so if you want to subscribe, you can do that to get to get notification of those videos. We’re going to be doing a full video on the cybersecurity ETF that we’re working on right now. So we can kind of you can see what we’re doing there as far as that goes, anyway. So continuing the investor education, I think this will be a fascinating area to continue to work on.
The other thing I’m going to do as an adjustment, not this Monday, but maybe by next Monday, I’m going to start doing a little bit of the What Happened on Monday, and the rest of the video will be a summary of the last week. So if you only want to watch one of them, instead of all of them, you can maybe catch up a lot faster and just watch that summary. Anyway, watch for that, and we’ll see what’s happening. And that was a request from a client. I’m here to serve you. I’m here to make sure that you’re getting what you need to get out of this. So, if you have questions, or if you have ideas, you know, keep sending him in. I’m more than willing to you know, consider what you’re talking about, obviously. So, good. Good to see you. I look forward to seeing you on Monday and have a great weekend.

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Disclaimer - Read More

Tom Vaughan is a Certified Portfolio Manager and CEO of Retirement Capital Strategies. Retirement Capital Strategies is a registered investment advisor located in San Jose, California.

The opinions voiced in these presentations are for general information only and are not intended to provide specific advice or recommendations for any individual(s). The information provided herein is obtained from sources believed to be reliable, but no reservation or warranty is made as to its accuracy or completeness. Statements and opinions are subject to change without notice. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. Accordingly, you should not rely solely on the information contained in these materials in making any investment decision as the material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned in this presentation. Before acting on information discussed in this presentation, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment advisor. Prospectuses, investment objectives, risks, charges and expenses of any investment product should be reviewed carefully before investing. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Retirement Capital Strategies and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Tom Vaughan or Retirement Capital Strategies unless a client service agreement is in place. “Likes” are not intended to be endorsements of our firm, our advisors or our services. Please be aware that while we monitor comments and “likes” left on this page, we do not endorse or necessarily share the same opinions expressed by site users. While we appreciate your comments and feedback please be aware that any form of testimony from current or past clients about their experience with our firm is strictly forbidden under current securities laws. Please honor our request to limit your posts to industry-related educational information, comments and questions. Third-party rankings and recognitions are no guarantee of future investment success and do not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation. Investment positions mentioned in these videos may be held in some of our existing portfolios. Tom Vaughan and Retirement Capital Strategies are unaffiliated and separate from those companies whose investment positions are mentioned and is not liable for their products or services.

By participating in any of these live streams, you agree that any questions submitted by you might be used by us in the future on this YouTube channel. We will not share your personal information.

If you have questions, please write to us at: asktom@talkmoneywithtom.com.

  • MoneyGuidePro®
  • Advent Software/Black Diamond Reporting
  • Riskalyze, Inc.
  • thinkpipes®
  • Right Capital
  • YCharts, Inc.

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