The Northern Star Newsletter 5/21/20 - Powell Somber on Recovery
Message from Jon
We opened back up today (Monday the 18th) and are getting back in the saddle of normal, if I can say that right now.
We have expanded out bench since January of 2020 to include:
- Jason Rudder, Financial Advisor
- Morgan Wicks, Assistant & Junior Advisor while she is taking her exams
- Tyler Hardt, CFA, MBA, Portfolio Management
We are seeing the Wall Street depart from Main Street at the moment which is giving investors some consternation and mixed messages. On one hand, you may hear how terrible, horrible and dismal the economic condition is not only in the US but around the globe at the present. Heads of State, Global Financiers, Investment Moguls and Billionaires are indicating concerns over what has happened and trying to extrapolate what in their opinions is likely to happen going forward.1,2,3
Some will be right and others wrong to be sure.
Let's assume you disagree with everyone above and are entertaining putting money to work at these levels? Before going any further though, let me be clear. There is a big difference in my opinion between preparing money to be invested and buying an index right now thinking we are in the recovery phase and on the rebound.
You may in hindsight be correct in your timing or you may be incorrect in your timing but ask yourself 2 questions:
- Am I willing and able to bet my retirement savings on being right at this moment given what all is going on in the world right now?
- Potential gain of 10% return for a down 30% risk?
- If you are investing new money at the moment, what you are saying is that the economy and companies are doing as well now as they were back in Jan of 2020?
- 36M American out of work vs Jan 5
- Recession vs Jan 6
- Oil prices low vs Jan 7
- Companies not offering earnings forecasts vs Jan 8
Because, if you are buying now or willing to buy now, you are in essence saying that we are no worse off than where we were in Jan of 2020! Let that sink in a minute and now you can better understand our stance and strategy we are taking towards the markets for clients and prospective clients. FOMO (Fear of Missing Out) is still very much present so be on guard and most importantly stick to your plan and be patient.
Till we speak again- enjoy the warm weather and a little bit lighter quarantine!
Powell Somber on Recovery
WEEKLY UPDATE - MAY 18, 2020
The Week on Wall Street
Stocks drifted lower last week, weighed down by Federal Reserve Chairman Jerome Powell's unsettling comments on the economy and signs of renewed tensions with China.
The Dow Jones Industrial Average fell 2.65%, while the Standard & Poor's 500 retreated 2.26%. The Nasdaq Composite Index slipped 1.17% for the week. The MSCI EAFE Index, which tracks developed stock markets overseas, slid 3.66%.