The volatility in our markets is back, alive and well! Just when we thought things were calming a bit, we get a rise in new Covid cases, a fallback on the easing of restrictions in some states hit the hardest by Covid, and more polarizing political headlines. The news cycle just isn’t slowing down at this point. The summer of 2020 will truly be a memorable one. But honestly, these are some of the things we have been concerned about and the market is responding accordingly.
Another important market factor we are watching is the quarter end, which is occurring early next week. The recovery we have experienced since late March has been remarkable and based on past experience, it is normal to see some level of “profit taking” as large pension funds and asset managers rebalance their portfolios across the board at quarter end. We are also participating in some rebalancing across our portfolios as needed. This activity is completely normal given the recent moves higher. In other words, we have been expecting to see some of this downward activity in the near-term. Unfortunately, the sharp spike in Covid cases is adding fuel to the proverbial fire. We are also dealing with a shortened, holiday week coming up. Trading volume tends to be lighter during these times. These are the type of opportunities we always watch for and will invest accordingly for the long-term.
Our Mosaic family remains healthy and we hope yours is as well. It is important to look after one another during these uncertain times. Please know we are here for you if you have any concerns, we tend to be very good at listening!
Stay safe and have a wonderful weekend.
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