The Economy and Our Investments
In 2020, after February-April three month Coronavirus bear market, most sectors in the US stock market have gotten stronger since the April pandemic bottom in late April. Then, more recently, we saw another big market surge in the month of August after the FED pledged to keep interest rates "lower for longer".
In investor speak, when the Fed says it will keep interest rates "low longer," it means the Fed is worried that the US economy has not stabilized nearly enough to take into account the big national unemployment numbers, outlook regarding the resilience of Covid-19, and how to deal with the massive US debt that has ballooned to historic levels since Trump took office.
Since our last Update, the Fed has said it will leave interest rates at near "Zero" for up to three years. Such desperate measures signify the deep underlying weakness of the US economy and the fragility of the stock markets. It also means the Fed will leave interest rates low simply to help the 50% of the S&P 500 stocks that are trending toward their bearish long-term levels.
That said, the Federal Reserve Board wants to create the appearance that they know what their doing. But the truth is they have never had to deal with the deep economic effects such a novel pandemic has caused. Truth is, the Fed is lying about their ability to keep the US economy from getting weaker.
Market strength and sell offs
Until the first week in September, the NASDAQ 100 Index and S&P 500 Growth index continued to make new highs, primarily with the help of about 15 large companies, mostly in the technology and renewable energy sectors.
Yet the New York Stock Exchange Index and the Small Cap 2000 stock index are still below their pre-Covid February highs.
In the near term, we are seeing the end of the retail "emotional herd" investors spending all their investable cash buying stocks and stock indexes. Now, we are experiencing a much needed stock sell-off which hopefully will provide us with new attractive buying opportunities sooner rather than later.
My biggest intermediate term concern is the desperate sociopathy of Donald Trump and the dangerous lengths he will go to intentionally create fear-mongering chaos - or try to sabotage the November vote.
If Trump believes a majority of his cult voters will believe his election corruption lies, he will manipulate it. A Constitutional crisis would not only create massive civil unrest, it will surely roil the stock markets as well.
The Pandemic and Our Investments
Which brings us to our stock and bond market investment opportunities.
With the pandemic still raging - with over 200,000 American deaths, Trump keeps pretending the Coronovirus is no longer an issue. And with no new economic stimulus in sight, when the Main Street economy is in the doghouse for too long, eventually the Wall Street economy will see a reckoning that is directly correlated to the real economy
After almost 6 months of Trump's political folly, denial, voodoo medical claims, and 200,000 American deaths later, it is definitely the Trump Virus!
More importantly, whatever "post-pandemic" turns out to be, no one really knows what is going to be the new norm with the US or global economies. I'm pretty sure it will not be "business as usual" like we were living with before Coronavirus.
Just know that as your money manager most of our decisions are based on the reliable investment concept of "follow the big money."
"Follow the big money" means we only invest in fund, stock, and bond vehicles that the large institutional money management firms are in the early stage of investing - and avoid the investments institutional firms are shunning or withdrawing money from.
Going forward, this proven yet always evolving strategy is now successful 75%-90% of the time (when backtested for many bull and bear markets over the last 10years).
The quantitative investment tools we use incorporates and integrates all relevant financial information automatically, simply because we are observing the "objective" volume of money invested, not the "who" or the "why" a potential investment is trending up or down.
Put another way, our human error-neutralizing investment strategy removes the daily distraction "noise" resulting from the endless information hustle of the financial media, out of touch political operatives, and social media.
Whichever clueless "gerontocracy" gets selected in November, the desperate civil unrest and the white supremacist mob attacks that Trump has encouraged will continue.
Yet Americans must understand that our Nation's unacceptable income inequality cannot be ignored anymore. The Coronavirus - which in just a few months has clearly exposed our Nation's deep inequities - has certainly let the obvious economic cat out of the bag!
It is no longer tenable that American citizens who sincerely want to work and contribute productively be denied fair and livable economic opportunities, including equal police protection under a non-racist rule of law.
If we are to get back to some degree of national sanity, the top economic 20% of US citizens must accept that our vastly unequal US capitalist system has gone way too far on the callous greed side. If they don't, we are going to see a new version of 21st century American fascism.
The counter-protesting working class whites (mostly young men) - who feel that their only value to society is being "white", own guns, and have a false savior like Donald Trump guiding them - need to quit blaming everyone but themselves for their self-imposed economic failures.
Uneducated white Americans - who are being left behind by our economically clueless two-party corporate power structure - will only achieve productive change for themselves and their families by no longer voting for the same vile fear-mongering, race-baiting right wing politicians who treat them like ignorant chumps.
The elitist Trump RNC doesn't give a damn for these increasing violent "white nationalists." Anyone with sane perspective can see Trunp is only manipulating their anger to act as his personal political intimidation army. Like they always are, they will ultimately be discarded and ignored by Trump and his minions after the election in November
Americans must get back on a sane cooperative political economic path very soon and stop allowing themselves to be used and manipulated by opportunistically power mad political forces.
If they don't, expect to see more demonstrations, more civil disobedience, more ignorant looting, and more deranged white supremacy vigilantism and anti-Semitism.
Finally, my primary professional responsibility is to your financial well-being and retirement security.
Know that we are only investing attractive investments using the well-tested strategy described above - and that our money management tools works effectively 80%-90% of the time.
In spite of the apocalyptic future Trump is trying to terrorize people with, know that we will make money in any political economic market environment.
"The mind is like a parachute. You only survive when it opens and stays open" - Frank Zappa