A Collective Sigh of Relief - November 9, 2020
A collective sigh of relief.... The election is behind us, and there is good news on a potential Covid-19 vaccine! We didn’t have large scale riots or civil-war; although Trump as predicted is contesting the “stolen election”. However, most of us continue to go on with our lives, and we have less reason to pay quite as much attention to Presidential tweets. The USA will have a centrist in the White House, and he will likely have to work both sides of the political spectrum to get any major legislation accomplished.
Financial markets are reflecting this new reality. Equity markets are higher as investors flee from the safety of fixed income and precious metals. Airlines, hotels, energy, and small company indices are all reflecting the brighter news this morning. What does this new information tell us here at August Wealth?
In general terms, we have used this morning’s gap higher in equity markets to reduce risk in portfolios. We believe the higher equity prices reflect a shift in public perception from anxiety to hope. We are still very positive on growth and markets, but obviously prices are now starting to reflect this collective relief. In our view of the world, things have not changed much, but the perception of reality has changed dramatically in a very short space of time.
We do not feel we have learned a great deal of new information in the past couple of weeks, but we do feel vindicated in our approach to risk and investing. Our process continues to follow these basic tenants:
Perception and reality are different. We remain committed to understanding how human nature and emotion can deviate from reality. November 9, 2020
We understand that we have little to no control over many situations and no control over the direction of financial markets.
Because we study the random nature of life and markets, we anticipate that we will see both positive and negative exogenous events.
We ask how those events will impact the risk in our portfolios.
Our disciplined investment process includes:
Your family’s appropriate risk level
Importance of diversification in your investments
Importance of flexibility as facts and sentiment change
Use of low-cost index funds to reflect our desired portfolio
Our fiduciary duty to put your financial interests ahead of our own
We are humbled by our client’s trust in us to help them navigate an uncertain future. If you would like to learn more about how we approach markets, and how we would construct a bespoke portfolio for you and your family, we would be happy to elaborate on our approach with you.
At August Wealth, we are motivated by the gratification that comes from helping you increase your wealth. By helping you achieve your financial goals, we help increase your freedom to spend more time on the things that matter most in your life.
Joseph Cardello, Principal August Wealth Advisors, LLC The Loft, 101 Franklin Street, Suite A Westport, CT 06880 Direct (916) 461-9451 toll free (800) 985-9477
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