Can You Feel the Tectonic Plate Shifting?

Can You Feel the Tectonic Plate Shifting?

 Do you feel that? The world is changing as we speak, and it’s a massive tectonic transformation led by the new Genesis Bull Market.

I first used the term Genesis Bull Market on April 17th, just after the Fed’s historic support was announced. Looking past the negative headlines at that time, I believed the worst was behind us with the recovery underway, and I have been patiently awaiting for proof ever since. The market is finally giving it to us.

First, Friday’s unemployment numbers were off the charts and far better than expected. They should get better when the extra $600 per week unemployment bonus goes away, and people are incentivized to go back to work.

Also, recently there have been other clues. The epic rotation from “stay at home” stocks (those you would buy if you thought the crises would last) to the economically cyclical companies (Recovery) quietly began a week ago, and is now underway with a vengeance.

However, it all started on April 9th when the Federal Reserve said there is no limit to the money printing needed to bail out the economy and that we shouldn’t worry about the consequences now. We should call that year zero.

I now have another axiom to add to “Don’t Fight the Fed”. It is “Follow the Fed – it prints the money”. (Tony Dwyer)

I know it seems unbelievable that the market can so easily shake off the chaos and social unrest along with the deadly virus, but that’s the reality. The powerful combination of historic monetary support by the Fed, and the rotation into economic reopening sectors like banks and transportation tell the new story.

For those who question the importance of this rotation, take a look at this staggering statistic. The top 35 performing S&P 500 stocks are all still down over 35%. This implies two things: That it has been extremely difficult to make money in this market, and that the investors are targeting the value names that have yet to perform well but should, as the economy reopens. 

We have all been locked up so long that the first sign of good news feels like the first day you feel better after having the flu. However, it is important to keep perspective. If you are in that retirement red-zone, measuring risk and reward is paramount for your success. That is why being a truly effective retirement advisor is so difficult. Getting the best returns, but with the least risk possible is harder than it seems, and what I pride myself on every day.

If you have been too defensive and or have more cash than you should, get it invested. These bank rates will kill you.

Feel free to contact me.

Cheers -Keith


“Invest for need, not for greed!”

Smart Money Newsletter

Written By: Keith Springer


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