David Edwards of Heron Wealth spoke for 25 minutes on:
Progression of the Coronavirus Pandemic
Friday's Labor Department Employment Report
The continued baffling rise in the major stock market indexes
2018 was a terrible year to be an investor. In 2018, US stocks fell 4.39%, international stocks fell 13.60%, bonds finished the year with gains of 0.01%, virtually unchanged.
NOTHING worked in 2018.
2019 was a fabulous year to be an investor.
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For the past several months, US stocks whipsawed with each presidential tweet about whether Trump is adding tariffs or suspending tariffs, talking to the Chinese or ordering US companies out of China. We’ve seen some days where the Dow fell over 800 points, which once upon a time was a big deal, but amounts to a decline of only 3% in a year when the S&P 500 is up 20.6%. When the Dow fell 508 points in October 1987, that was a decline of 22.6% in a day!
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In June, US stocks reversed May’s 6.4% decline and rallied 7% to new all time highs, with the S&P 500 up 18.5% on the year. Half the gain is a reversal of the 5.0% decline in 2018, while the rest is a full year’s gain delivered in 6 months.
David Edwards appeared on a panel discussion recently to discuss his outlook for the rest of the year.
After 6 months of steady gains that took the NASDAQ and S&P 500 to new record highs in late April , we’ve had two and half weeks of sharp declines. Peak to yesterday’s trough was 5% in the S&P 500 and 7% in the NASDAQ. Stocks are recovering somewhat today. YTD the S&P 500 is up 14.5% and the NASDAQ is up 17.3%. Several clients have called or emailed to learn if there is reason for concern.
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A long time client writes, “No capital gifts this year. Seeing a Dow that is falling like a stone, day after day, does not inspire me. It is acting like 2008 and the economy could not be more polar opposite from 2008.”
Exactly! Yet, US and international stock market performance is the worst since 11 years ago during the 2008-9 financial crisis.
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A new client writes, “So . . . why should I not sell all the stocks I still have a profit in?”
That is a reasonable question. From the September 20th all-time high, the major averages have taken quite a pounding.