PWM Weekly Market Update

Happy Saturday,

The Great Wall of China is open to visitors, the NFL draft is in high gear, and Georgia is letting some businesses reopen. If you need a hair cut and you like to bowl, a visit to the Peach State may be in order.

Our rebalancing software runs weekly, looking to sell expensive assets and buy cheap ones. It’s an automated process. We did not rebalance any portfolios this week as volatility continues to tumble. For the first time in a while, it felt like a typical week, as far as investments are concerned.

The US Index of Consumer Sentiment is an indicator I follow. The 68-year average for the index is 86.7, and the recent reading is 71.8. When consumers are optimistic, sentiment is high. When consumers are pessimistic, sentiment is low. The all-time high was 112 in March 2000, before the Dow Jones Industrial Average fell 33% from March 2000 to March 2003. The historical low was 51.7 in May 1980 before stocks rose 228% from 1980 to 1987. In March 2009, consumer confidence touched 57.3, before the market climbed 236% from March 2009 through yesterday. The moral of the story: When consumer confidence is low, it’s an excellent time to buy stocks.

The current asset allocation for public pension funds is 49% stocks, 23% bonds, 7% real estate, 19% alternative investments, and 2% cash. The 30-year average annual median return for pension funds was 8.3%.[1] The S&P 500 returned 8.2% over the same time frame.

Here’s how stocks, bonds, and other asset classes performed this past week.

  • The S&P 500 fell 1.3%
  • The NASDAQ fell .67%
  • International Stocks fell .95%
  • Emerging Markets fell 1.5%
  • Long-Term Bonds rose 1.8%
  • Gold rose 2.5%
  • Oil fell 34%
  • Chinese Stocks fell .85%

If you’re looking for some good news, I recommend watching Some Good News on YouTube hosted by John Krasinski (The Office, Tom Clancy’s Jack Ryan, A Quiet Place, & 13 Hours). He hosts the show form his home and highlights good news from around the world – and space. Here’s the link to his channel: https://www.youtube.com/channel/UCOe_y6KKvS3PdIfb9q9pGug

Like a drink of cool water to a weary, thirsty soul, so hearing good news revives the spirit. ~ Proverbs 25:25 (TPT)

Bill Parrott, CFP®

President and CEO

Parrott Wealth Management

http://www.parrottwealth.com

[1] https://www.nasra.org/investment