Transcript
Hello, everybody, welcome to Friday, the S&P 500 was down .17%. Today. Luckily for us, our accounts really came through today and did well, for the first time really, so far this week, unfortunately, but we did see a rotation back into the things that we own seem to be a lot of interest in those again. And what’s happened this week, I think, is really fascinating. We’ve seen this happen now a couple of other times. And there’s this kind of really, you know, strange rotation that happens. And then all of a sudden, it goes away. Let me show you an example. And I’ll discuss kind of a concept with you that we call the equity style box.
So this is something actually that I used to see all the time in Morningstar. And this is a way of classifying, you know, different types of stocks, or, in our case, different types of ETFs. And so, you know, you have large stocks and medium sized stocks and small stocks, this has to do with a market capitalization, which is really just, you know, the number of shares outstanding times the price per share, and then there’s value, okay, so value stock would be something that’s considered, you know, inexpensive compared to its earnings, or revenues, or sales, or what have you. On the opposite side, we have Growth, which is a company that, you know, might be expensive, but there’s an expectation for a lot of growth in the future. And then the Blend, which is just kind of in between. So I’m going to use a style box here where I use the S&P indexes. So this would be the S&P 500. This is the S&P Midcap 400. And then this is the S&P Smallcap 600. And I’ll show you an example here too. And then you’ll be able to see all nine of these pieces. And then I’ll show you some rankings for what’s been happening. So one of the ways I like to look at you know, what’s happening is this tool here through a company called ETF Replay. And what happens here is I can wait different time periods A and B, two different time periods, and volatility.
So when I really want to see like, what’s what happened, you know, this week, and this is everything except for today. But that’s relative, I’m really interested in that. What I’m looking for here is just you know, what happened to last week for Number One, a Return A today for Return B, and then volatility, I also have a rank in there. And I like to look at the last 12 months with a relativity and it ranks them kind of one through nine, there’s our boxes. So if we look at what happened this week, we have S&P 500. So that’s Large Value. And then we have Large Blend, and Large Growth. So all big stocks, right, and whatnot. So now if we look at a longer period of time, let’s just say 12 months, and we go to say three months. And we hit the run model here, you can see it’s actually exactly the opposite in the sense of these first two, we’ve got, you know, Small Cap Growth, and Small Cap, you know, Blend, and then we have the S&P you know, 500 big Growth, all, you know, essentially Growth or Blend. And so what has happened it you know, really interesting this week, is what we’ve been seeing is kind of this Growth motion, smaller Mid Cap, you know, and if it’s a big stock, it’s it’s a high growth, stock, really running. And that’s been kind of dominating, and then all of a sudden, in one week, whoosh, it flips around completely Value’s at the top. And so here’s the thing that I think is important about this is just, you know, is this a one week blip? Or is this a trend, I am concerned that this trend will happen at some point in time, because a lot of these Value stocks are companies that you know, are going to do better once the vaccine comes out, and the virus really dies down. And I do think we’re going to see this rotation into that. And we’ll have to be aware of that.
Because there’s only so much money in the world that can go and get can’t go into everything. And so if it’s going to those areas that might not be going into the areas that we kind of have right now. And so I that’s what I’m watching. Now, one of the things that did happen is today, it rotated back into where it was before. So we literally had a three day run with this, you know, flipping into this Value category and Large category and what have you. And so, you know, not much of a trend so far. But again, just want to point out kind of how we look at it. And what we’re looking at as far as that goes, you know, we did have some stop losses trip yesterday. And I’ve got some cash now to put into the portfolios. So we’ll do our research this weekend. And you’ll see some trades coming through on Monday to kind of, deploy those most of that money was in IRA. So you know that that’ll be something that we do here. I’m actually kind of excited about that.
I really, you know, want to make sure that we’re on the right waves at any point in time. And clean energy took a pretty good beating in there and those were the ones that mostly got tripped. And that’s going to be a little bit hard to kind of come back out of that. And so maybe in the interim, you know, we take a look at some other areas that are moving really well there’s some stuff happening right now that’s moving very nicely. So I look forward to that. And really amazing week, not a great week for us to return. But we’re still doing great this month though. We’re doing great this year. So I’m very excited about that. As far as that goes, you know, everyday doesn’t always work out the way that I’d like. But overall, I think things are good. Oh, not too bad. So, look forward to talking to you on Monday. Thank you very much.