Broker Check

Mosaic Weekly Article 6/19/2020

June 19, 2020

Happy Father’s Day to all of the dads out there! I hope each and every one of you enjoys your special day and finds something fun to do! I always appreciate this time of year as we reach the “peak” of our daylight hours and now more than ever, I have found myself enjoying the outdoors. We have been fortunate in Maryland to have had some cooler weather to go along with these longer days. Hopefully, you and your family have been able to resume a few more “normal” activities.

The financial markets continue to try to find some stable footing. While the volatility did spike a bit more over the last week or so, the positive longer-term trend has remained mostly intact. That is the story for now.  But there are a few things showing warning signs again. The southern States where the Covid guidelines have been relaxed more than other States are showing a jump in the number of new cases daily. Protests are continuing, group settings are increasing, and virus fears are decreasing. The monitoring of this data will be very important over the next several weeks. The social unrest in our country continues to evolve as more and more voices emerge, while the path to clarity remains clouded. The momentum is building around the upcoming election in November and these headlines will only increase going forward. Yet, through all of this, the financial markets have held fairly strong. Why is this?

The Federal Reserve has remained an active participant in our financial markets and in the overall economy. Easy money policies, coupled with rhetoric indicating that interest rates will remain low for the foreseeable future, have acted as a “backstop” to any prolonged market weakness. It seems impossible to know how long this backstop will or can last, but all indications are that these policies will be left in place for some time. Technology companies have been leading the way and many stocks like Apple and Microsoft hit all-time highs during the past week. With so much negativity being expressed by the media, it all seems a bit surreal. Our clients have begun to verbalize doubts again and these concerns are valid and well respected. We hear you loud and clear, and we share our own skepticism about how things will unfold in the near-term. In times like this, we remind ourselves that from an investing standpoint, having “cash is king”, which provides some sense of security. Our long-term strategy and path for moving forward, while fluid, does remain intact. We will recover from the recent economic fallout but the duration of that recovery now seems shorter than it did a few months back. Our challenge in the coming months will be navigating the “headlines” and taking advantage of the opportunities when they present themselves. To use a baseball analogy, “hitting singles wins games”, and we believe in that strategy for our clients’ long-term financial success.

In the meantime, reach out with questions or concerns, enjoy the outdoors when you can, and stay safe!

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