In such interesting and different times, some things still change very little – signs of Spring bring good weather, pleasant moods, gorgeous flowers, and March Madness showing up at our doorstep.
It was just over a year ago, as we hear everywhere we look, that the Pandemic took hold of our lives. As we holed-up, the financial markets sank into, not the worst collapse ever by any stretch, but the FASTEST fall on record. And then in a time when things looked so bleak, the markets found a bottom and began to rally higher. Then they plodded forward for the remainder of the year and into 2021, defying all odds and prognostications.
In truth, it became a market of some sectors rallying (those finding positive results and benefits from the Covid world), while other areas struggled (everything travel and leisure, energy, and financials). And, in truth, a handful of themed stocks defied gravity and rose beyond reason. “Profitability and soundness” were in large part relegated to the sidelines while “themes and trends” carried the day. That famous phrase “FOMO” took hold – Fear of Missing Out – and this helped propel some stocks to levels very difficult to justify. Plus we witnessed newsmakers and stock pickers that were wildly successful from tweets and social media posts. Ideas came from bulletin boards. Interestingly, this all sounds like a parallel with the dot-com boom and bust. Remember the commercial with the trucker who had bought an island?
More recently, we have seen some fundamentals come back in to play – Solid, profitable companies seeing their stocks rewarded again. Financials looking strong. More volatility in the “stocks of the day” from a few months ago.
Today, the most common questions have to do with vaccinations. We have, or we haven’t, or in many cases we are in between doses one and two. And another thing rarely changes – I can read, right now, predictions of financial market gloom along with predictions of up, up, and away. . . Still the case no matter where the market rests – high, low, or somewhere in the middle.
And inflation. Is it or isn’t it? The answer is “yes”.
What has kept us steadier (and sane) along the market path is simply the plan that we control our risk. As many have heard me say before, we might not catch every market point on the upside, and we avoid the biggest falls on the downside. When you control volatility, you maintain SOME control over your outcomes and you control your emotions. And those financial planning goals and hopes get to remain “in view”. Strategy seems to work.
I have mentioned before that I am periodically asked “What about “x” company or industry?” And the reply might be “It doesn’t meet our RISK profile”. There are moments when that response might sound “insufficient”, but there are far MORE times when it rings true.
We are a quarter into 2021. Patience is still important. (It isn’t really ever unimportant). I believe some views that the markets have already been factoring in this recovery so far and we intend to be careful, still, of the unknown.
I remain here to talk, answer questions, or strategize as we have with so many. It is meaningful and rewarding and, for sure, not without challenges. I remain loyal and committed to the pursuit of steady, good returns, control of downside risks, and financial planning for the best routes to get from here to there.
Reach out when you can. As well, I will be in touch.
With good regards,
Key Holleman
Investment Advisory Services are offered through Raymond James Financial Services Advisors, Inc. Ascent Wealth Advisory, LLC are not registered broker/dealers and are independent of Raymond James Financial Services.
Any opinions are those of the author and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected.