Shelter-in-Place Stock Market Update 3.9.2021 – Was today a new trend or a blip in the current trend?

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.

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Transcript

Well, hello, everybody, welcome to Tuesday, the S&P 500 was up 1.4% today, and today was the polar opposite of yesterday. Yesterday, the investments that we have in our models, the energy, the value pieces, the inverses, even the inverse treasuries, all of it had a really, really good day. And today, the switch was on and it went completely the other direction into the growth type areas, which we still have a tremendous amount of these growth pieces left in our taxable accounts. I was talking about those yesterday about making sure we kind of hang in there on those, just because there’s high tax capital gains we’d have to pay. I mentioned the robotics and artificial intelligence piece as an example that had a big day today. So there was this huge move to the growth side.

Now, the thing that we have to you know, watch for is switching. And so is this going to be something that continues to be an issue where everything’s going back in that direction again? Or is this a short term blip? Or do we get to a more even position where we’re kind of battling back and forth between growth and value on sort of a daily basis, because last year, everything on the growth side this year, you know, at least for the last three, four weeks here, everything’s been on the value side. And normally, it is actually fairly even amongst those. And we always have to kind of keep both in the portfolio, because it’s going back and forth, like it did yesterday versus today. My one concern about the growth side right at the moment, is today’s move was very violently up. And a lot of times when I see that it has to do with short covering.

So apparently, a lot of these different pieces that have been coming down a lot have a lot of short interest on them. And what that means that there’s a lot of shares outstanding, that are looking to make money when the stock drops, well, if it starts to go up even a little bit, whoever is using that short covering has borrowed those shares. And they’re going to have to buy them back in order to give them back and not end up with a significant loss, which of course, creates even more buying. So we’re seeing today, a lot of pieces that went violently up. And a lot of them were pieces that have been down quite a bit anywhere from 10 to 40%. From their highs, even over the last, you know, few weeks. And so people are trying to make money by having those continue to fall. And a little bit of buying comes in can create these moves.

Now, the problem with a short covering move, it’s that it’s kind of a false move. There’s a bunch of people buying shares that aren’t really that interested in, you know, that buying that stock, so it can go up, they’re buying it to cover themselves, because they actually thought the stock was going to go down. And you need to kind of have that belief system, you know, to kind of get these going again, especially since a lot of these stocks are selling at fairly high, you know, valuations. So it’s going to be really interesting to see now I have seen short covering rallies like this turn into full on recoveries, because people get excited, and they start jumping back into the stocks again.

So I think tomorrow is going to be really interesting to see what happens, I’m going to have to ask you to have a little bit of patience about our model portfolios, mainly the monies that we have invested in the IRA type accounts, they did not do well today. Yesterday, we made money in a down market today, we lost money in that market. Actually, over the two days, we’ve done fairly well. But it’s just one of those things, you know, just in portfolio design, we especially got hit on the two inverse positions. Obviously, those were fantastic yesterday. And it seems like they’ve been going you know, every other day, I do have triggers and alerts built into every piece, including those inverse. If they do trigger, you know, we’ll move on and move on to something else.

But I would like to see some you know, more stability in the market and some more motion going in the right direction. I do like what we have at the moment. And let’s see what happens. I do believe personally, that there is going to be a lot of interest in these value type stocks, because they are fairly low priced. And I think that as the recovery comes, you’re going to see quite a bit of interest in moving those. And they sold off a little bit today. So let’s see what happens. You know, it’s not enough money in the world to make everything go up every day. And so it does tend to kind of move around in a normal market. This has not been a normal market, obviously. So I suspect you know, we’ll find out fairly soon here, what this direction is going to be for this market. And so I look forward to talking to you tomorrow. 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.