What can we learn as investors from the media’s mishap which caused the short term market sell-off this past week?

For one, the media, even the financial news, is ratings-driven, and what you hear from newscasters and their guests should be taken with a grain of salt. Some would say if you see a CEO promoting their company on the news, trouble is on the horizon! Of course, this is somewhat in jest, but the point we are making is the financial news is there to entertain as much, if not more, than to provide you investment advice. So, what can we expect as investors and Americans going forward?

One thing is sure, there is a long recovery ahead. Analysts moved the annual GDP projection from – 35% down to – 32.9%, which is positive, but a steep hill to climb. Many Americans are applying for first time unemployment even now, and coronavirus quarantines hold back economies without a firm timeline to reopen. Despite the negative news in the media, markets fared well through the month of July. 

In fact, all major U.S. indexes were positive for the month of July.  By market cap: large-cap S&P 500, mid-cap S&P 400, and small-cap Russell 2000 all saw gains in that respective order.  Internationally, China’s Shanghai was July’s big winner, while most developed markets declined.  Canada’s TSX rose, but European markets all finished the month either flat or down.   In commodities, silver was the big winner, rallying throughout the month along with gold that saw strong gains as well. While we remain optimistic at the economic recovery, we maintain a strategy that is meant to protect those who need preservation and participate in the recovery for those who are seeking growth in their portfolio. 

For those taking distributions from their accounts, our team has implemented a strategy that allows for principal preservation and limited long-term growth without the adverse effect caused by reallocating for distributions. For those with some time before they plan to take distributions from their accounts, there is an opportunity for growth beyond the highs we saw January 2020. For those with an appetite for risk and the capacity for volatility, there is the opportunity to outperform markets using individual equities. Your advisor will be in contact if a significant change to your investment strategy could take place. If you have any questions about your current portfolio or the current investment strategy protecting your wealth, please do not hesitate to contact your advisor.