Shelter-in-Place Stock Market Update 12.31.2020 – What to expect and how to react in 2021.

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.

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Transcript

Well, hello, everybody, welcome to New Year’s Eve 2020, is finally ending. The year that doesn’t seem to want to end, finally will. And today is also the 200th video that I’ve done, I’ve done a video for every single day that the market’s been open since the 22nd of March. And I’m wearing green shirt today. Well, the S&P 500 was only at .64% today. And as you know, I wear the green shirt when the S&P is over one and a half percent and the red shirt when it’s under one and a half percent on the downside, but I’m going to modify that and I’m going to wear a green shirt every 100 videos also. So just thought that would be kind of fun.

Today’s market was kind of low volume. I really like to focus on next year. And there are a couple key points that I really want to make. First of all, I think next year has a chance to be a pretty decent year. And that is because you know the vaccine is here. It is being distributed. And so one key that we want to focus on is does the vaccine work? Are there issues with that? Is it accepted? Are there enough people that are taking it. If that does happen, I think that releases this pent up demand with all of these people that have been sitting around and saving and what have you getting out and starting to spend some of that money. And then kind of the last piece, the third piece is just this low interest rate. And again, people are saving money, but they’re saving it into vehicles that aren’t paying them anything either. So you will see money coming out into the stock market in that environment, as well as coming into the economy, which of course, you know, ultimately does help the stock market to as company earnings start to recover and/or improve.

And so those are the three key pieces really. Now, what we’re going to have is all kinds of noise coming in, oh, Georgia, you know, Democrat, Senate or not, or, you know, all of these things. But let’s keep our focus on those three particular areas. If the vaccine works, it releases a pent up demand and we have zero interest rates, those three pieces stay in place. So if the vaccine doesn’t work, you know, we’re going to want to figure out what to do and how to deal with that. Now, this takes me to my next key point, and that is to make sure that we’re not responding to predictions, we’re responding to what the market actually does. And that’s the difference, that is a huge difference.

So here’s a here’s a great example. I saw today that the Vanguard, you know, Total Stock Market Index, okay, that’s one of my favorite benchmarks, incorporates almost every single stock on the US markets, it was up over 20% for 2020. There wasn’t any predictions this year, almost at any point in time that that would happen, that we would make over 20%. Now, our holdings because we reacted the right direction. This year, we did actually quite better than 20% on our stock, more market portions of our holdings, even after fee, I’m really happy about that. But my main point is, we want to be able to react to the market itself and not to predictions, because we’re going to get tons of predictions, and they’re constant, they’re coming at us every day.

You know, right now, I think the one thing we’re going to hear a lot of predictions about is what’s going to happen with this, you know, run off in Georgia who’s gonna win who’s not going to win, and then what that’s going to mean and how that’s going to translate to the market. And, you know, which is fine, I do think we have to pay attention to predictions in the sense that we need to be able to react if those predictions are correct. So I take predictions, and I make models for different situations. So if this happens, I’ve got a model for that already designed. And I want to move the assets towards that model if that prediction does come through. And so that I think that’s the key thing. You know, focus on those three pieces in 2021 vaccine working, pent up demand, zero interest rates, and then let’s react to the market itself and not to prediction so in the market tells us you know, that we should be in Clean Energy, because everybody’s moving into Clean Energy, okay, we can react to that, you know, I don’t know where it’s going, going forward, I don’t need to, I just want to watch and see what’s, where the market is going and then just join in with the market as far as that goes.

And so that that’s what I’m looking at for 2021. I think those are key components, you know, the reaction versus prediction and the three pieces of watching for 2021 I’m really looking forward to 2021 I think it could have some good potential. A lot of things are lining up. Well, who knows, you know, we’ll find out as far as that goes. But I am very, very excited that you have joined me on this journey. And hopefully everybody got something out of this and you know, maybe moved down the road in terms of your knowledge about investing, because I think that helps everybody. So thank you very much and I look forward to talking to you next year on Monday. Thank you.

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.