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The “Great Sorting Out” Is About to Take Place
From Baltimore – We just had a terrific bounce in the markets. What does it mean for you?
Does the data suggest that we’re finally stemming the tide of this pandemic? Is the stock market truly the leading indicator of what lies ahead for our economy?
From my vantage point, investors appear to be sorting themselves into two camps: those who are generally hopeful things will normalize for the better, remaining optimistic about the long-term prospects for the market, and those who see things falling apart and worry about irreversible damage to our economy.
But as our Chief Investment Strategist Alexander Green famously reminds us…
You ultimately have to be an optimist to be a successful investor.
Optimistic investors were trading on hope last week. It seems any good news, no matter how fragile, currently tends to overshadow the bad news, propelling investors to move money back into the market.
In today’s Market Wake-Up Call, Alexander Green, Editor of The Oxford Communiqué and The Insider Alert and bestselling author, describes his take on the recent upsurge in share prices and what it should mean to you right now. Alex and Associate Franchise Publisher Rachel Gearhart discuss the Club’s “rifle” approach to recommending stocks, choosing only those companies that can withstand the economic fallout of 2020. These are companies Alex believes will come back strong in 2021.
Listen in today to Market Wake-Up Call to learn about Alex’s favorite way to screen for the best companies to buy now. And if you want to learn more, be sure to reserve your spot for Alex’s free event with Bill O’Reilly taking place on April 22 at 1 p.m. ET. He’ll go into more detail about what he calls the smartest investment strategy of all time.
On the other side of this month’s volatile market swings are the pessimists. They remind us that even before the coronavirus crash, the market was overdue for a major correction. Pessimistic investors are nervously sitting on the sidelines, piling into more cash – and gold.
I put myself somewhat in the middle, comfortable in my cynical optimism. Last week’s heartening news about Gilead Sciences’ antiviral compound remdesivir potentially showing promise in certain COVID-19 patients was cause for optimism. The fact that reported cases and deaths in New York City were trending down was cause for more hope. And in a recent Reason article, science correspondent Ronald Bailey cited several respected global scientific and medical research groups that are tracking between 161 and 243 treatments and vaccines for COVID-19 that are currently proposed or are already in development.
Yet there is annoying “fine print” to all this optimism. Bailey concludes that while researchers are racing to discover COVID-19 game changers, none have yet proven to be effective fighters in our war against this pandemic. And as Gilead cautioned last week, “Anecdotal reports, while encouraging, do not provide the statistical power necessary to determine the safety and efficacy profile of remdesivir as a treatment for COVID-19.”
I see the market’s recent moves as the best reflection of this split down the middle between the optimists and the pessimists. While stocks have rebounded 10% so far this month, gold has hit new highs. The yellow metal went above $1,700 for the first time since 2012. It’s actually at record highs in currencies other than the U.S. dollar.
Here’s some good news – using the Club’s recommended asset allocation, you don’t have to choose sides. We remain diversified in both stocks and gold and gold mining shares, though we trend more optimistic, recommending that a majority of your investment assets go into stocks.
So stay the course with your asset allocation and listen in to our Chief Investment Strategist’s approach to sorting out the winners and the losers, and getting you into those companies he is certain will survive and thrive as we get through this.
Take good care this Sunday,
Julia