Marc Cuniberti So dear reader, are you getting tired of all the ups and downs in the markets and in the news in general?
Seems like getting a grip on anything nowadays is impossible. From CoVid to the markets to colorful presidents, nothing is as it seems, or at least for a while. The world seems to get a grip on things, only to have it slip through our hands again a week later.
From unemployment to supply shortages, to vaccines to new variants, new bailouts and stimulus checks, inflation and stock market plunges followed by stunning rallies, I could ask “what the heck is going on in the world and when will we return to some sort of normalcy?”.
It’s no wonder the markets of the world can’t seem to make up their minds as to which way to go. Mankind in general seems to have the same confusion as to what to do and where we are going.
The rotation in and out of stock sectors has been extraordinary. One week technology stocks are up and industrials are down, then the following week it reverses. Bonds, which can react opposite to stocks, rise one day, then fall the next.
Lately, one of the shining stars in the world of stocks has been Apple. Holding up relatively well in the face of recent sell offs, it has risen steadily in the last few months to touch an all-time high. Definitely not a recommendation to buy or sell any securities, including Apple, it wouldn’t surprise me in the least to see it reverse hard at any time or continue its remarkable resiliency. Yes, the markets are that crazy as to make even this analyst second guess which way the markets will go and when.
The polarization of America is what I would really call it and seemingly it started with the 2020 Presidential elections and accelerated with CoVid, the mask debate, the vaccination debate and the recent public trouncing of some of the latest Washington policies. At this point, who’s to say which direction is the right one?
Meanwhile, no one person or group seems to want to admit they’re wrong in any of this, so everyone seems to plow on blindly, regardless of affect or outcome.
That said, economically speaking, an argument could be made on both sides as to whether the market and/or economy are careening off a cliff or headed for greatness. An endless rally on Wall Street since April 2020 took almost everyone by surprise, driving the Dow to an almost double. One could ask just how high it could go in the face of the last 18 months ballistic rise.
On the other side of the coin is argument that with five trillion or more in newly created money by the Fed to pay for all the CoVid relief and infrastructure packages has to go somewhere and historically Fed spending will eventually find its way into Wall Street, and undoubtedly it has. Will trillions more also take the same path and flow into stocks driving the indexes even higher?
Will another CoVid variant arise and panic the markets downward? Will CoVid ever go away entirely and will the vaccines ever provide 100% protection, or at least offer some comfort as to partial immunity so we can all go back to work and play once and for all?
It is said the markets hate uncertainty, and it’s not a stretch of the imagination to say at this particular time in history, there is more than enough uncertainty in the markets and indeed on the entire planet due to CoVid and its effect.
With that in mind, when uncertainty reigns supreme, it is prudent to be more safe than sorry with one’s retirement savings. In order to do that, moving more into cash and fixed income and lightening up on traditional stock holdings may be the order of the day. By maintaining at least some stock positions mixed with cash and fixed income, you might still participate in a market rally if it occurs, yet not be entirely slaughtered should all hell break lose in the markets.
This article is opinion only of Marc Cuniberti, and may not represent those of this news media and should not be construed as investment advice nor represents the opinion of any bank, investment or advisory firm. Neither Money Management Radio (“Money Matters”) nor Bay Area Process receive, control, access or monitor client funds, accounts, or portfolios. Contact Marc at (530)559-1214.
