Market Update: June 21, 2022 – 3 Reasons The Market Went Up Today

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 had a great green shirt day today up almost two and a half percent. I saw three main catalysts for why today worked out so well. Number one is the market was stretched so far to the downside over the last couple of weeks, I like to use the rubber band analogy where you when you pull down in a rubber band and pull and pull and pull the pressure to come back up, it gets higher and higher, the more you come down, and you get kind of a pop to the upside. The second thing that I saw happen was that they do surveys for individuals and professional investors, where they’re trying to find out what they feel about the future for the stock market. So, you know, do you think the market is going to be up in six months or down? Well, the number of people answering down is at a near record high. And so if you think about it, a lot of those people probably already did something there maybe the reason we’re down so much the last couple of weeks, they’ve sold out, and it just leaves those people smaller group but powerful group because there’s nobody else left to come in and buy and the sellers have already sold and you get this pop and move motion upward. Uh, probably the most important catalyst though today is really, in my opinion, the number of shares that are being shorted on the stock market. So hedge funds specifically are shorting individual stocks and Exchange Traded Funds at the highest level we’ve seen since 2008. And when that happens, when you get some motion upward, those funds have to buy back that stock to cover potential losses.

Of course, when they’re buying back that stock, they’re making the market go even higher. And so if I was to make a an anatomy of a recovery, kind of on average from a place like we are now that’s exactly what you’d end up with some negativity that gets so high, you get some pop, creating some coverage of shorts, you get more coverage of shorts over subsequent days, then the individual investor gets involved, you know, doesn’t want to miss out on the run upward. And eventually, the institutional managers start to get involved. And right now they’re sitting on a lot of cash. They’ve had, you know, huge amounts of cash right now. And we’ve got this scenario where boom, all of a sudden, you get back to where you are. We’ve had all of those happen in the run ups that we’ve had so far this year, except for that last part and the institutional best are really coming back in, in my opinion. And so what we’re looking at here, I think is the institutional investors looking at the Federal Reserve, and really doesn’t, they don’t want to fight the Fed. So the Fed is raising rates and aggressively trying to fight inflation. You want to sit out until maybe we see the Fed starts to at least, you know, soften their tone and maybe even start to support the economy on the other side. So, you know, it’s going to be interesting to see how this particular day turns into what type of run up and how far it goes. So I look forward to talking to you 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.