Transcript
Hello, everybody, welcome to Thursday, the S&P 500 was down about 1.3% today. And it was a really rocky day, the Federal Reserve Chairman, Chairman Powell was speaking today. And every time he speaks, the market definitely gets, you know, a little bit volatile. But he said some things today that, you know, the market didn’t particularly like to a certain degree, he talked about letting the inflation that might come here as this economy heats back up, run, and they’ll do something if it got really bad, but basically, they wouldn’t intervene. And obviously, the market had some expectations that there might be some intervention here at some point in time. And he talked about the fact that the inflation that they saw, really, they thought would be temporary.
And it’s what I was talking about before, you know, when everybody tries to go on the airplane, or go to the hotels or, you know, go on a cruise line, and all of those companies have cut back, you know, their supply and the demand picks up, you’re probably going to see some price pressure there and some increases in price. And so we’re seeing that, we’re watching the bond market continue to fall, overall bond market was down about a third of a percent today. And of course, that makes the yields go up, which makes that asset more competitive to the stock market.
But the biggest piece of what’s happening all together is this rotation out of all of the pandemic stocks, you know, the Clean Energy innovative technologies, and the kind of the growth stocks that did so well for us last year, just selling off and selling off. And so we had a couple of changes today, let me share my screen, and I can show you kind of what we’ve done here. Okay, so this is our traditional portfolio, we also have an ESG portfolio. But you know, we’ve already had the total stock market index, this was down about 1.7% today, and then we have these three fairly large value pieces all with Vanguard, all did better than the total stock market today. financials is what we bought, we sold the semiconductor and the online retail, which got hit pretty hard today. And financials, which is kind of banks. And those types of things do really well, when interest rates come back up. And so this is an area that I’ve been following. For some time, energy did fantastic today, this was actually up 2.4%, it was up yesterday, a lot too.
So good moves there, we’ve had this short piece, right, so this was up 1.2%. And this is going the opposite direction, S&P 500. Again, don’t usually use these, but these markets are kind of requiring that and we added one more short piece from the sale of the two growth pieces. This is going short, the QQQ that’s the top 100 stocks on the NASDAQ, these are tech heavy related. So theoretically, if this rotation continues into this value side into energy and financials, a couple of industrials materials, all these things are growing right now. Because there’s an expectation that the economy is going to come back around, you might still see some sell off coming into this tech arena, which is what you’re seeing here. So that’s not a bad thing to hedge either. So we do have more of a hedge in case things do get worse. If I look here, you know, kind of at the 60% model, you can see, you know, the bond side. And so, you know, the bond market was down a 1/3 of a %, this did better, the short term did better, the short term high yield did better, these two high yields here did worse. And we did have a trigger on those right at the end of the market. So that’s probably something we’ll deal with tomorrow.
But overall, really happy with the portfolios. You know, we also have ESG portfolios, and we made some changes in those essentially the same thing, we moved from, you know, the innovative technology into, you know, the short queues, and we move from the mid cap growth into this emerging market piece, which is, seems to be holding up pretty well. And so these are all portfolios, where they’ve screened for companies that have certain, you know, environmental, social, and governance, you know, criteria. And so that’s what these portfolios so we have, you know, 20 portfolios, essentially 10 for each, 10 for traditional, 10 for the ESG. And so, that’s, that’s what’s happening right now, a couple of changes, you know, coming down, you know, we’re making the right moves. You know, I kept some balance in that growth, just in case. But all of my little triggers went off today. And so we made our changes and I just been, you know, applying the discipline.
And I think we’re in a great spot. I’m pretty happy with where this is right now. You know, we are in that position to be able to take advantage of you know, this rotation into this recovery type stocks. And the one thing you know, have to work on really hard with We’ll be those inverse positions. They’re very difficult to figure out when to, you know, get out of them and such too. So, but I’ll keep them in there for a little while. And you know, if the market does continue to come down, it’ll give us a parachute. Again, we’re not getting that parachute from the bonds at all. Actually, the bonds are falling too. And so that’s what that’s for. It’s kind of a bond parachute replacement at the moment. So very happy with that. So well, we’ll continue to take a look at this. And I look forward to seeing what’s going to happen tomorrow. Thank you very much.