Transcript:
Tom Vaughan:
Hello, everybody, welcome to Thursday, the S&P 500 was up 1.4%. Today, that’s the sixth big update in the last eight trading days, the market has got a great momentum to the upside right now, we try to describe kind of what’s happened so far in terms of that motion upward and and why it might continue to go. So first of all, what we really had was a reversal caused by the individual investor, according to quite a few of the articles that I read. So they’re coming in with their money buying the dips, and they’ve got the market moving in the right direction. And the individual investors really important now much bigger components since the pandemic started, but probably not big enough to rise this market all the way back to a new all time high all by themselves, that’s going to take institutional support. And so one of the things that happens with institutions, CEOs, big pension funds, these hedge funds and these different types of things, is that they are held to a standard just like I am, a benchmark might be the S&P 500, or some benchmark for what’s happening. And when the S&P 500 jumps, you know, 8% in a short period of time, if you don’t have full investment, and you’re not capturing that game, you got a bunch of money sitting on the sidelines, because you thought the market was going to go lower, or a bunch of money in bonds, because you thought the market was going to go lower, you’re now losing out to that benchmark. And so what usually happens once we get these first jumps, like we’ve seen, and why it’s so important, is that the professional money starts to come in, you start to see that with much higher volume. And basically, that’s money coming back in to try to, you know, keep up with these indexes.
There’s lots of reasons the market could go down from here at some point in time, specific issues with the Russia ups, you know, financial situation is one thing I can think of, certainly what’s happening in China with the different lock downs is another potential issue. But there is a tremendous amount of momentum right now to the upside, you can see it. I mean, the semiconductor index that we use today was up 5%, still down for the year, but still really powerful, powerful motion going on. money’s coming in at a really high rate, especially from this instance, this individual investor. So I think, you know, this is what will keep it going, I think if it’s going to get back to an all time high again, sometime in the next two, three months, then you’re going to see this institutional money coming in. And they just very similar to what we saw in the pandemic, the market was dropping lots of institutions were gathering money, and it started to come back slowly but surely. And you know, everybody still thought it was going to go down more eventually, it just didn’t. And it just kept going. And then pretty soon everybody’s on board. And that’s when you start to get these, you know, good recovery. So, you know, again, anything can happen. But this is super important. What’s happened every single one of these days that goes by right now where you get a good upward motion market is another kind of brick in the foundation of being able to kind of recover and come back so very happy with what’s happened at this point. So we’ll take a look at what happens tomorrow. Thank you.