Market Update: December 21, 2021 Market Jumps But I Remain Cautious

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:

Tom Vaughan:

Hello, everybody, welcome to Tuesday, the S&P 500 was up 1.8% today. And I want to start off just by answering a question, you know, why did I get more defensive yesterday, right before a green shirt day. And so let me describe some of the things that I see that are happening. I’ve watched a lot of different things to try to figure out what’s going on, I feel like one of my jobs just to make sure that if we do have a bigger downturn, that I’m trying to protect your assets. You know, whether you’re heading into retirement already in retirement, I try to smooth out those rates of return as much as possible. And so I watched what’s called the moving averages, you know, the 250, day moving average, for example, we have seen all of the major indexes fall through the 50 day moving average. So that’s somewhat of a concern that’s happened before, even since this upturn has started. So but still, that’s an issue. We’re also following what’s called Momentum breakout bands. And so these are kind of unique, I really liked them. And what they do here is when the price jumps up above the upper band, everything turns blue, and it’ll stay blue, until the price falls below the lower band, and then it goes red. And so right now all of the indexes are red. So this would be you know, the S&P 500. And the down and as dec, and the Russell 2000, Small Cap index, the NASDAQ 100, which is, you know, the top 100 stocks on NASDAQ. And I follow Vanguard Total Stock Market Index, that’s really one of my favorite indexes, all of them are red right now. And so that’s that’s an issue. That’s not that common. Usually, that does mean there’s some pretty good weakness going on the market.

We also follow the volume that’s happening. So you know how much volume is coming through, at least since Black Friday, the volume has been pretty significant, a lot of these pieces. Now I have what I call my top list, and this is the top 200 things that I’m following, that are potential areas that I would invest in, they call from the 2300, ETFs, and all of the different stocks out there. And so what I look at is I flip through those on pretty much a daily basis. Right now 175 of those are red. That’s pretty high, actually. So what you’re seeing right now is this kind of broad based sell off.

The other thing I look at is okay, once we get into the red, how far do we have to go to break back above that upper band and create up kind of a blue scenario by scenario. Um, for most of the cases we’re looking at here, they’re pretty far away, actually. And so there’s a little bit of room here, you can get these big updates like today, get a couple more will be blue good, and things will be off and running. And we’ll be done talking about this. But right now, we have this combination of Omicron fears that could slow down the economy, and combined with the fear that the Federal Reserve is trying to slow down the economy. And those two are kind of crashing into each other and creating a lot of problems. And most of this higher volume and downward push on the market has come during this timeframe, since Omicron, was first really discussed, which was Black Friday. So I think you know, there’s still that out there, we’ll have to wait and see how this really plays out and figure out those types of things. But here’s what I see all together. Number one is these are opportunity situations. For me, as far as I’m concerned. For two reasons. Number one, I can watch for these things that are coming down, see which what holds up better. What is you know, so for example, cybersecurity is holding up better real estate’s holding up better, certain semiconductor stocks are holding up better, they’re still kind of in the negative area in a lot of cases. But those are things I watch for. And if those continue to hold up better when the market does bottom and things go blue, then I can maybe move into those at a cheaper price. And a lot of the times I have found that things that hold up better in these downturns tend to bounce a lot faster.

Again, people weren’t willing to sell them as much as some of the other things. So those are just some examples. I have a list that I will keep constantly, you know, going right now, what’s doing well, if I had to go back in tomorrow, I’m ready. The other list that I keep is just what if things continue to deteriorate? And so how do I deal with that? So first of all, we have the taxable accounts, which I don’t want to take capital gains on, went through today, and did some selling on some small losses and some small gains just to make some adjustments. But I’ll have a plan just in case because we don’t want big gains to turn into losses. So, you know, we’ll do what we have to do there. And of course, then we have our plan for the IRA. So kind of two different plans for what would happen if things deteriorate as far as that goes.

So, you know, again, I see this as my my job is to try to protect the assets here. And it’s something that I work really hard at as far as that goes. So I look forward to seeing what’s going to happen again. These downturns are necessary to have a continuation of This bull market that we’re in, I do believe that the market will be higher at the end of next year than it is now. But I also think that we’re going to see a lot more of these little downturns happening. In order to stimulate that buying, it kind of brings in this bargain shopping mentality that gets us momentum and gets things going up and up. And that’s how you get to these new all time highs. So if we’re going to do that, we have to have these downturns. And I’ve said that several times throughout this entire pandemic timeframe. And so, you know, we’ll see how this plays out as far as that goes and where it might go. Hopefully, it’s already bottomed. I’d be fantastic as far as that goes. But we’ll see. So we know we’ll keep watching. I try not to make predictions. I basically just react to what’s happening. I found that that works better than trying to predict what’s going to happen in the future, and then try to craft some, you know, thought process on how to do that. So, nonetheless, look forward to seeing what’s going to happen tomorrow. Thank you very much.

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.