Why your financial plan is like a marriage

 

Hello Eagle Wealth Community, 

It’s almost Valentine’s Day so we’ve been thinking a lot about relationships.  Your investment strategy is sort of like a marriage.  One day you may feel like everything’s going swimmingly.  The next day, there might be a Sherlock Holmes type investigation as to who didn’t load the dishwasher, and if they did, was it even done properly.  And even the best marriages and partnerships have moments where one or both partners look around and ponder, “What if I’d gone through with astronaut training? Or pursued that Disney On Ice tour?  Would I still be here today?” We sure hope so!

The stock market, much like a marriage, has days of ups and downs.  Just look at what happened within the last few months.  During the first week of January 2021, the S&P500 stock market index fell 2.7% on Monday, only for that downturn to be erased and post a 4% gain from that low by Thursday.  And so, much like our relationships, we love to see a rise from the lower-left corner to the upper-right corner for market gains, and likewise for relationship gratitude over the years.

Trying to make sense of the market and the economy during a pandemic is like trying to determine the health of a long-term relationship based on one day.  The market may be fickle, but it’s important to remember that your financial plan was created based on your aspirations, time horizon, and risk tolerance.  This is why we focus on financial planning and not only on investments.  The best plans (and marriages) are built for the long run, committed to communication, and consideration of the big picture, and not just the current events.   

This Valentine’s Day take time out of your day-to-day routine and do something special with your significant other.  And if you’re solo this year, do something kind for yourself.  Find a little laughter or maybe enjoy some quality time with a friend.

From Your friends at Eagle Wealth 

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State of the Markets

It’s that time of year again for the State of the Markets update.  There is no shortage of opinion about the current economic climate.  Between headlines and talking heads we could all use a fresh perspective.  That’s why we’re going straight to the source and sharing City National Rochdale’s 2021 economic outlook. 

The City National Rochdale investment team, led by CIO Tom Galvin, discuss the firm’s outlook for financial markets amidst a challenging landscape of economic uncertainty. 

They answer big questions like:

• COVID-19, vaccine progress, and prospects for recovery.
• Will the rally in equities continue?
• Key sectors and themes for a post-pandemic world .
• How central banks, global monetary policy, and low interest rates might impact the search for yield.

 

Run time: 45 minutes, 50 seconds

 

If you have any questions about what you’re seeing in the news, please give us a call.  We’d welcome the chance to discuss the economy with you.

 

The Week on Wall Street Stocks notched strong gains last week, paced by a string of solid economic reports and consensus-beating corporate earnings. The Dow Jones Industrial Average gained 3.89%, while the Standard & Poor’s 500 advanced 4.65%. The Nasdaq Composite index jumped 6.01% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, climbed 1.96%.1,2,3 Bull Story Remains Intact As the social media trading frenzy fizzled, investors were able to focus on more fundamental issues, like economic data and a fresh batch of corporate earnings. Pleased by an economy that appeared to be growing stronger, coronavirus cases in decline, and an improving vaccine rollout, investors bought stocks with enthusiasm. The rally last week was broadly based, with the Energy, Financial, Communication Services, and Technology sectors posting gains. The stock market’s optimism on an improving economy was seconded by the bond market as the 30-year Treasury rate rose to nearly 2.0% by Friday. When yields rise, bond prices fall. Falling bond prices may indicate that investors are less interested in Treasuries and more interested in other investments that benefit from a stronger economy. Rising yields may also reflect worries that a growing economy may spark inflation that may lead the Fed to rethink its zero-rate policy.4   The Inevitable Denouement It was just two weeks ago that a social media chat forum appeared to contribute to a buying frenzy in a handful of struggling companies, unsettling Wall Street and capturing the nation’s attention. These stocks staged a broad retreat last week as more was learned about the trading activity.  A similar social media-inspired buying effort was also initiated on silver. But silver prices experienced a modest gain before quickly reversing direction just days later.5

THE WEEK AHEAD: KEY ECONOMIC DATA Tuesday: JOLTS (Job Openings and Labor Turnover Survey) report. Wednesday: Consumer Price Index (CPI). Thursday: Jobless Claims. Friday: Consumer Sentiment. Source: Econoday, February 5, 2021 The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.   THE WEEK AHEAD: COMPANIES REPORTING EARNINGS Monday: Simon Property Group (SPG). Tuesday: Twitter (TWTR), Welltower, Inc. (WELL), KKR & Co. (KKR), Martin Marietta (MLM), Fiserv (FISV). Wednesday: Cisco Systems, Inc. (CSCO), General Motors (GM), Coca Cola (KO). Thursday: Walt Disney (DIS), AstraZeneca (AZN). Friday: Dominion Energy (D). Source: Zacks, February 5, 2021 Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

 

https://www.cnbc.com/2021/01/03/stock-market-futures-open-to-close-news.html

 

 ^{The Wall Street Journal, February 5, 2021}

^{2. The Wall Street Journal, February 5, 2021}

^{3. The Wall Street Journal, February 5, 2021}

^{4. The Wall Street Journal, February 5, 2021}

^{5. CNBC, February 4, 2021}

^{6. IRS.gov, October 7, 2020}

^{7. PsychCentral.com, July 8, 2018}