At the time of writing this article, the S&P500 is testing all-time highs and has experienced a year-to-date return of 6.3%. While growth stocks have tended to outperform value stocks in the recent past there is some indication that value-based investing may prove to be beneficial going forward as price to earnings ratios find some stability. While much of the uncertainty surrounding the pandemic is behind us, it is important to remember we are still navigating very uncertain waters from a financial perspective where economic results looks very different than financial market results. This level of deviation is a result of numerous variables; including the consensus view that the substantial reduction in economic production is a short term consequence of the pandemic and will right itself in the near future. It is important to note that while millions of vaccinations are being distributed, we are seeing spikes in cases in cities around the country. In addition, the financial markets continue to balance the potential injection trillions of dollars into the economy through the passage of a massive stimulus package with that of an increase in proposed tax rates on corporations.
As news and the reactions of financial markets remain fluid, it becomes more important to take a measured approach to you investment choices- choosing a level of risk appropriate to your investment horizon.
We at GEBA Wealth believe a substantial amount of good news is priced into the market at the present time, which could place downward pressure on the market going forward if we see negative news. As a general comment, we continue to recommend* dollar-cost-averaging into the market as well as ensuring that our investors are diversified. We maintain that short/mid-term investments should have protection from market risk, while providing long term investments the potential to grow.
Let us know how GEBA Wealth can help. We welcome your calls and emails at (800) 826-1126 or [email protected].
*These are general comments and do not represent recommendations. Please consult your financial advisor for recommendations.
– Fixed Annuity 5-year rate: 2.7%
– Stable Value Fund: 2.13% (prior 30-days)
Securities are offered through Cape Securities, Inc. Member FINRA, SIPC. Investment Advisory Services are offered through Cape Investment Advisors, Inc. GEBA Financial Advisors are Registered Representatives of Cape Securities, Inc. Insurance offered through Truchoice Financial.