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  • May 13, 2021

Market Update: May 13, 2021 Why the market went up today

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:

Hey, everybody, welcome to Thursday. The S&P 500 had a great day today, it was up 1.2%. We saw lots of green on the board, lots of things that were up really, really good day all together, makes up a little bit for some of the things that have been happening. Monday, Tuesday and Wednesday here, I don’t think we’re out of the woods in terms of dealing with this inflationary pressure. Matter of fact, I would assume it’s going to get worse.


But again, the thing that the market seems to be locking in on now is just that a lot of the systemic inflation pieces like rents, and health care costs, and those types of things actually came in pretty good yesterday with yesterday’s report. And a lot of the things that are going up are related, of course, to the pandemic and what’s happening, and theoretically, could be a temporary situation that works its way out here relatively soon, the stock market is a forward looking mechanism. And so if inflation is really hot right now, obviously, there’s a chance that it could be lower coming forward. That’s the big debate is this a temporary inflationary situation, or some of this going to be permanent?
It is interesting to me when you look at kind of labor costs, if restaurants or something have to increase the cost, you know, the price that they’re paying, in order to track people in? How do you get that to go back down, right, so there are some some pieces here that will be kind of interesting. As far as that goes, we’ll see how this plays out. But generally speaking, an inflationary environment means that you have a situation where the economy’s doing really well, which is kind of what’s happening now. And you’re looking at a scenario where employment is getting better, and there’s more money floating around, and companies make more profits, which ultimately is the key driver.


Again, deflation is really bad. Inflation is not great if it’s really high. But it’s better than that, I’d probably take too high of inflation over any form of deflation, as far as that goes, where prices are dropping, which may seem like a good thing as a consumer. But from a business standpoint, it’s kind of a nightmare. So that’s one of the things that, you know, we’re going to see going forward here is just this dramatic reopening is going to continue, I don’t see this pulling back. But the other part that I talked about yesterday was that the fact that the US is quite a bit ahead of a lot of different countries in terms of the vaccine, we’re ahead in the reopening aspect of it. If you look at the mobility data for how much you know, US people are moving around is that negative 17%, it was at negative 20. Not that long ago, which just means that there’s 17% less movement happening here in the US amongst individuals, as compared to February of last year, kind of before the pandemic started. And if you look at the world, actually, we’re doing a bit better. And that also India’s now negative 52% because of their issues, Ireland’s that negative 47%, etc. So you’re not seeing a full reopening impact into the globe.


Alright, it’s happening here, it’s happening in different places. And that will slow down inflation. Matter of fact, what we saw today, was that the 10 year Treasury yield, which had been going up and up and up actually went down today. And again, once it gets to a certain price, everybody around the world says, hey, I’ll take it if it’s at 1.7% is the US government backed, you know, dollar backed 10 year Treasury, and my country is paying .1%, like in Japan, or what have you, there’s a demand for that. So that kind of keeps that lid on that. And that’s I think we saw a really good market today, partly because of buying that came into the Treasury market, because it got up to the point where people were willing to pay and willing to buy.


And so again, and that has a lot to do with this kind of global resurgence. And so I think we’re quite a ways away from the globe to having this type of really high inflationary situation coming, just because again, the vaccine delivery is not happening nearly as well in a lot of different countries as it is here in the US, for example. So very interesting to see how this will play out as far as that goes, but we’re in the right place. If you look today the growth stocks did okay. Some of them did poorly. You know, the ARK investments that I’ve been talking about did poorly today, clean energy did poorly today, even in up day, they’re not doing well.

The value type things that we’ve been investing in some of them did really, I mean, the regional banking piece that we had today was up 3.8%. Transportation was up, consumer discretionary was up, the reopening pieces were up a lot. In our traditional model, we have 15 pieces in there that the stock market, 12 of them did better than the S&P 500 today.


So, that’s what’s kind of going on as far as that goes, we’re in the right spot. You can see it when the market comes back around. We’re seeing a continued rotate rotation into this reopening area, and a continuing rotation away from kind of the other areas that were doing last year really well. Interestingly enough, cryptocurrencies didn’t do well today. So I’m going to be very fast To see what type of relationship we have with we have a very strong relationship between bond yields and the stock market that’s very well defined.
But what type of relationship do we have between cryptocurrencies going up or down and the overall stock market? I don’t see it yet. It’s still too early, but there may be some relationship there. And again, today, cryptocurrencies down stock market up, we’ll see what happens, kind of going forward.

But really interesting day, and I look forward to seeing you tomorrow. We are having Go Live with Tom tomorrow at 12:15pm to 1:00pm Pacific Time. You just go to golivewithtom.com. You can type in questions and just ask and you can if you don’t have one, you can listen to some of the others. They’ve been really fun, so if you get a chance, feel free to join us and otherwise, we’ll see you on tomorrow at Go Live with Tom will be next. And again, we’ll do another video for the market update tomorrow. So look forward to talking to you then. Thank you very much.

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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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