Major stock markets around the world reversed much of April’s bear market scare. Big Tech roared back to life, reclaiming market leadership; however, momentum outside of high growth sectors signaled resilience in the recovery.
Attractive risk-return trends in value stocks, internationals, and small/mid-cap presented opportunities to diversify outside of U.S. mega-cap stocks.
Corrections Are Loud, Recoveries Are Quiet
Those who stared too long into the abyss of a potential global meltdown are now facing a risk to the upside.
Market panics can heighten behavioral risks among investors like Fear of Missing Out and Fear of Getting In. The price tag for emotional decisions means locking in losses and missing breakout rallies in equities.
Corporate profits and long-term productivity will determine stock prices in the long run, not sensational headlines.
Patience and Perspective
After exiting most holdings in March and April, the strategies that employ the FSA Safety Net® have mostly gotten reinvested in stocks and are now participating in the recovery rally. Our game plan hasn’t changed: Have an exit plan and follow the money.
What Happened in the 2018 Trade War?
The first bout with tariffs culminated in a -19% correction from October to December 2018. Neither fears of a US-China decoupling not exorbitant champagne duties could ultimately stop the S&P 500 from a 48% bull run over the next 14 months.
The Big Picture
We focus on managing through the day-to-day noise. History shows that a consistent, well-built plan is important when investing. The FSA Safety Nets® are designed to help manage risks and allow you to sleep at night.
While only change is certain, we are passionate about serving client needs, uncovering new opportunities, and protecting your portfolio against downturns (not all FSA strategies utilize FSA Safety Nets® for downside protection).
Please remember to inform your advisor of any changes in your life that might affect your investment objectives and how we manage your money.
Jordan Daugherty, CFA, CMT
Senior Investment Analyst
Disclosures are available at www.fsawealthpartners.com/disclosures/market-update.
FSA’s current written Disclosure Brochure and Privacy Notice discussing our current advisory services and fees is available at www.fsawealthpartners.com/disclosures or by calling 301-949-7300.
