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Trevor's Weekly Market Reviews

Trevor's Weekly Market Reviews

| August 03, 2020

Are you covered by a retirement plan at work?  Notable Number 3 in this week’s Weekly Market Review details how workers in Colorado who are not covered by an employer’s retirement plan, such as a 401(k), will now be covered by a state sponsored plan.  While I am a giant supporter of retirement plans and talk endlessly about how folks need to save more for retirement, I’m a skeptic of these state sponsored plans.  I’m not suggesting there is fraud of illegitimacy in these plans, but rather I do not have a great deal of confidence that these plans will be successful long-term.  If I was a Colorado resident, I’d be digging in on the details of this option vs. creating my own IRA where I maintained more control.  Many government or state sponsored retirement plans are not panning out the way they were envisioned.

Last week the big Tech companies like Amazon and Apple announced earnings for the 2nd quarter.  Many of these giants beat the already high expectations.  Meanwhile, some other industries have seen their earnings all but disappear in the 2nd quarter.  Specifically, some airline companies earnings were down as much as 90% from the 2nd quarter of 2019. 

Apple excited the market with the announcement of a 4 for 1 stock split.  Stock splits by themselves do not change shareholder value.  They do, however, change the price the shares are trading at.  When Apple made the announcement, their share price was about $400.  Assuming the price doesn’t change, once the split occurs, shareholders will then own four shares worth about $100 each.  Even though the split itself doesn’t change the value, it does bring the shares down to a lower price where retail investors might be more willing to purchase shares.  This additional buy interest in-turn can increase demand for the stock pushing the price of the shares up.

As always, we hope you find this week’s Weekly Market Review both interesting and informative.

Click HERE for the Weekly Market Review

Trevor N. Coe, CFP®