Quarterly Market Update – July 2020

To say the last quarter has been interesting, not just for the investment world but the world in general, would be a vast understatement. Yet it is because of the unprecedented times we are living in and the way business is now being conducted that we believe providing a tool such as quarterly webinar updates and reviews has more impact and value than ever before. 

In general, we saw a large comeback almost across the board in the 2nd quarter, but with yearly numbers still down. Of course, this is no surprise with approximately one-fourth of the economy idle. Many investors sold everything due to the uncertainty, creating an abundance of cash on the sidelines, potentially waiting for the right opportunity. While we currently see some value in taking a look at tech, biotech and recessionary stocks, what’s most important for the individual investor is to have a plan.

Check out our full 2nd-Quarter Market Update webinar here:

With real-time interaction with our attendees, we also covered a broad range of topics, including:

Interest rates

Rates will likely remain low for some time, perhaps through 2021. 

The impact of government debt

Increasing debt could ultimately lead to inflation, which is not necessarily bad for the investor in the short term. Long term government debt servicing can be problematic, as it tends to crowd out other discretionary spending.

The impact of the election

Typically, we don’t alter our philosophy based on election results. Historically, the markets tend to favor split governments rather than Congress and the White House in the hands of either party. That said, a Biden presidency is likely to see an increase in federal taxation.

Real estate 

Real estate continues to provide opportunities, although caution must be exercised, particularly in the commercial arena. The luxury home market remains strong with very limited inventory and cheap money.

Getting back in

For those with cash to invest, fundamental principles of goals and risk tolerance always apply, but one strategy is to begin investing now slowly and continue each month. Remember, the market is not going to tell you when the time is right for investing.

Spinnaker seeks to act as our client’s personal CFO. In the investment world, the only thing constant is change. We like to emphasize the ABCs of investing: asset allocation, behavior and cost because these are areas over which we have control. If you’re looking to take the next step towards your next investment strategy, get in touch with us here.

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