Transcript:
Tom Vaughan:
Everybody The S&P 500 was down point zero 6%. Today almost flat as far as that goes, but the Dow actually hit an all time high today with the close, you know, again goes back to 1880. So, whenever it closes at an all time high, it’s kind of exciting. But we had a weird day with the NASDAQ down 1.4% and Small Cap stocks were up and what have you, I want to talk about some different things that I see that happen right at the end of the year, and right at the beginning of the year, where we are now. So generally speaking, at the end of the year, people are selling things to capture losses is called tax loss harvesting. And so what we saw, for example, was the Small Cap stocks taking a really big hit from really kind of mid November to mid December. And could be that part of the reason that was happening is because Small Cap stocks underperform for the year, there was a lot more people that had losses in those, and they were capturing those losses.
Now, be careful drawing, you know, conclusions from that – Small Cap stocks are horrible, well, maybe not. Because it could just be tax loss selling. Well, at the beginning of the year, people are doing just the opposite. They’re selling those things where they have really big gains. And so if you look at like the NASDAQ being down today, and companies like Apple and things like that having a down day, part of the reason could be that people are taking gains, because Apple had a good year has some gains. And people often will take gains at the beginning of the year. That’s what we do. We often work on the taxable accounts right at the beginning of the year, it’s what we did yesterday. And the reason is, because I’d rather take a gain right now, and then have a chance later on, if I have a couple things that don’t work out that I can sell for a loss to offset that gain gives me the whole year to kind of work that off if I can. And so that’s what’s probably happening, at least in my experience, and watching the market for a lot of years. Got to be really careful to draw conclusions from these timeframes, like you said, Oh, small caps are terrible last year, might not be correct. Hey, Apple, and big tech stocks could be terrible this year. Again, that might not be correct, either. Because it might have to do with taxes, and what’s happening there in terms of the sales and the buy.
So, you know, we’ll see what how this plays out. I do think this year is going to be a little bit nutty, just because of what’s happening with the virus and the supply chain issues and the labor issues. And then of course, the Federal Reserve, which is probably the biggest story of the year. So we’ve got some things coming up here eventually with earnings that should be coming out that probably will be pretty good. And then we’ll have you know, news more news from the Federal Reserve, you know, which might make the market a little bit rocky So be careful of trying to draw conclusions from what’s happening right now, in my opinion. So anyway, that’s what’s going on. Look forward to seeing you tomorrow. Thank you.