Bad news sells newspapers, gets clicks and makes my phone ring and email ping. It was a busy October 2nd for me as the Friday headlines read that the stock market was plummeting due to the President having COVID. In all fairness, it was a down day for the markets with the DOW Jones Industrial Average down .48% and the S&P 500 down a little less than 1%, but not exactly what most define as a plummet. In fact, markets swinging by 1% or more in a day have become routine in recent years. No matter your politics, or what news station you prefer, more than ever, the news is carefully constructed and word-smithed to fit what the news organization wants it to be. Sometimes facts are hard to find, but clearly on Friday the market didn’t fall apart in any big way. Taking things at face value is probably a naïve thing to do right now given our highly divided political landscape. In my opinion, the truth about the news, is lost somewhere in the middle.
The first paragraph in this week’s Weekly Market Review details the good and bad that Octobers of past have brought for the market. In recounting some of the markets best days ever, 3/24/20 makes the list. I had many clients who were able to make some investments while the markets were down earlier this year, but plenty of other clients that lament that they missed the best opportunity to snag good companies at discounted prices. If all fairness, you had to be ready to act quick and sometimes even quick isn’t fast enough, as the rebound occurred just as quickly as the drop. Additionally, those that did invest money on 3/23/2020 had no idea at the time, that they would get returns most would be pleased with over a year’s time, the very next day. With a well-built portfolio long-term gains can sure be expected, but fast short-term gains certainly can’t. The old saying, better lucky than good comes to mind.
This week’s Notable Numbers for the Week contain some pretty amazing statistics. Notable Number 2 point out how much money markets have grown this year. I have two thoughts about that increase – 1) a lot of money printed by the government has yet to be spent and 2) the interest that money markets pay is not the reason leading to the surge.
As always, we hope you find the WMR both informative and interesting.
Trevor N. Coe, CFP®