Transcript:
Tom Vaughan:
Hello, everybody, welcome to Monday, the S&P 500 is up point 6%. Today, really good reversal. Actually it was down, hit some very important support points jump back up, especially right at the end as tech was up 1.6%. Really good, we’ll have to see what happens going forward here. You know, we’ve had enough downturn enough kind of technical pain, I wouldn’t be surprised to see if we don’t go a bit lower here, at some point to find some kind of bottom. This is a week though we’ve seen some reversals in the past, we’ll see what happens here. Because the Federal Reserve is meeting going to come out and speak on Wednesday, would last couple of meetings, the market has kind of rallied right after me because some things that were said were, at least, you know, a little bit too positive.
It doesn’t take much right now there’s so much negativity built into the market, just a few negative a few positive things can kind of get things going. But I have some thought today that came from a client meeting that I had this morning, has been with a client, she was talking about how she really sees, you know, this market, sort of like a big teeter totter. So essentially, you know, it gets really high, and things go really well. And then what we’re going through right now, it’s just kind of that balancing and trying to bring that teeter totter back into balance. And she’s really pretty, right, if you look at the S&P 500, over the last five years, it’s made almost 89%. If you look long term at every five year period, the average return is a little over 43%. And so really what you’re looking at there is a stretch where we’ve got this big situation way above average. And so things start to come down.
I know it’s hard to watch, it’s hard to see this, it’s hard to look at the statements, these are actually really positive things for the market. In my opinion, I’m much more nervous when things are going nuts, like they were, you know, at the very end of 2020 in the beginning of 2021. And we’re seeing all of that stuff unwind. We’re seeing lots of these stocks that went really, really, really high with very poor earnings, maybe no earnings, actually. And now they’re down 50 80% That’s a good thing. We’re we’re getting back to a situation where you know, cashflow matters, companies like Microsoft, you had an Apple and what have you that have good cash flow, are actually holding up better than the market altogether. Certainly you’ve had downturns but nothing like what we’ve seen with these companies that have, you know, valuations that were through the roof. And so as those unwind, we get back to more of this normal market, like we saw, you know, even let’s say in 2019, where, you know, things matter that that should matter, in my opinion in terms of valuations and what have you, you know, we went into a bubble mentality coming out of the pandemic, because of all the money that was floating around. And that’s unwinding right now. So I think this is a healthy portion of the unwinding, getting that teeter totter back into that balance, and letting you know the market, get back to where it would normally go. We still have a ways to go before that happens, in my opinion, but don’t lose hope here.
This is still a good time to be an investor. You know, we’ve all done really well over that five year period better than we would have normally. And so this is part of the pain of that it’s just kind of that contraction that we have to go through here. This is a normal piece of what happens in terms of how these markets work. So look forward to being able to see what’s going to happen this week with the Federal Reserve, and I look forward to talking to you tomorrow. Thank you very much.