What Is Your Current Market Outlook?

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.

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Transcript:

Easan Arulanantham:

The stock market has been looking good. Is this assault assigned for the long term?

Tom Vaughan:

Yeah, well, the stock market, you know, it’s actually down this week. So, but definitely, you know, way off is lows that established on the 16th of June. And so we’ve had a really nice run. But in these bear markets, okay, which is where you have more than a 20% downturn, and I’ll call this a rolling bear market. All right, we have two different types of bear markets that we’ve seen here. 2018 2020, we’ll call that a V. bear market, right? They came down and came straight back up. In these rolling ones. 2000 2008 are the last two big examples I can think of, you often get these run ups that can be quite dramatic. And things look great, just before everything falls apart again. So right now, if you look at the hedge fund managers, they are shorting this market, right? individual stock. I just saw this in Bloomberg. This morning, individual stocks are shorted at the 84th percentile just been way above average. And because they’re looking at history, they’re looking at this as just a bounce on the way back down as far as that goes. So that we got to think about that. On the other hand, we are in this run up we’ve had it was unique in that we retraced half of the loss, a 50% retracement. So since World War Two, every time we’ve gotten back at least half, we’ve never gone down to a new low. I mean, we go down right but not to new low. So that’s very reasonable. And there’s a whole bunch of other things that are happening, I think, on a technical basis that show good things about what’s going on with the market. And if you even look at like commodities and oil, and you say they’re getting softer, and and those are precursors for inflation, and certainly gas gas prices have been coming down, essentially every day for weeks. Now, maybe that doesn’t hold. But that’s a really big deal for inflation right now. So but I would say that the answer is a little bit muddled right now, because of where we’re at.

We’re right below the 200 day moving average. And right above this resistance point that we just broke through, and broke through at 4170 on the S&P 500. And we’re you know, we want to get to 4350, I think to really show that we broke through the 200 day moving average, broke through the trendline that’s connecting the highs. And so at the moment, you know, I would say that you can’t tell what’s going to happen, you could probably make a pretty strong argument that the bottom is done. If we break through the tunity moving average and break through that trendline get to 4350 and then maybe even have a run 4400 4450 Whatever it might be, then you’ll say okay, it’s gonna be a really unusual, I mean, wildly unusual situation. Even if you look back to 2008 and 2000 downturns, they didn’t retrace 50%, they retraced quite a few times as a rolling market, but they never got above 50%. And they kept falling back down until they finally hit their bottom. And so, you know, this is a really different market, we have a pandemic, we had trillions of dollars pushed out, right? Neither one of those things happened in 2008 2000. And so it’s going to be a little might be a little bit different. Maybe the 50% retracement doesn’t matter in this environment? I don’t know, we’ll see. But just from a long term standpoint, obviously depends on what you mean by long term. I mean, some of my clients long term is the next statement, you know, next month, what’s going to happen?

So my clients, you know, it’s a long term is a very personal thought process. You know, so if you look at 25 years of history, okay, you know, I don’t know, if you’re 75 years old, maybe you’re not thinking about 25 years of history. So I’d say you know, over the next few years here, maybe five years to 10 years, the market has done. It’s only had 110 year negative rate of return, really going back to the early 1900s. And that was actually ended in 2009. So that was pretty big downturn, 57% down, big financial crisis. We can have some things that happen here that creates deterioration in the economy, that’s for sure. But banks are pretty solid. And that’s one of the big ones you have to watch out for. 2000 was more of an overpricing scenario.


We definitely had that here, but we’ve run out a big chunk of that overpricing it still depends on what measure the gap. It’s still somewhat overpriced, but I was nuts right for a while. I mean, these Spax that were coming out and Now some of the stuff is, hey, the celebrity has an idea. Let’s give him $2 billion and see what happens. Well, I know what happens. And that stuff was kind of that excess that we saw in 2000. You know, he’s talking about bingo.com, which went from $1 to $9, you know, and never even had the ability to do bingo online and went out of business. You know, this is stupid stuff that was happening. We had some of that here. So this is a bit more like 2000 The overpricing because of the easy money than it was 2008. But so, market outlooks short term here, let’s wait. Break through 4350 Looking good break below 4170. We might be in for some more pain, right? So I’d wait just be patient.

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.