Watch the CPK Market Action Report: September 2020

Stocks surged during the month of August! Will September be able to sustain investor sentiment and continue building on those big gains?

Watch the full 3-minute Market Action Report now: 

September 2020

Stock prices surged in August as investors cheered positive news on COVID-19 and welcomed a month-long series of upbeat economic reports

The Dow Industrials picked up 7.6 percent while the Standard & Poor’s 500 Index climbed 7 percent. The Nasdaq Composite, which has led much of the year, gained 9.6 percent.

The S&P 500 index set a new high in late August, completing the fastest recovery from a bear market in history. The Nasdaq Composite also hit several new highs and closed above 11,000 for the first time.,

Signs of a pick-up in manufacturing activity, better-than-anticipated factory orders, and falling new jobless claims showed an improving economy.

In the final week of trading, news of a potential COVID-19 treatment and reports of a rapid test for detection helped keep the month-long rally rolling.

The election season is moving into a higher gear as November draws near. Will uncertainty about the election get reflected in the stock market?

Since 1992, the S&P 500 has lost an average of 2 percent in the three months leading up to the election. But it has been higher 43 percent of the time. Keep in mind that the 2 percent average includes the 20 percent drop prior to the 2008 election resulting from the ongoing credit crisis.

While past performance is no guarantee of future results, the lesson may be evident: Prepare for some short-term volatility while not losing sight of your overall investment strategy.

For the month of September, my models are only 35% exposed to the domestic equity market with a primary focus on the Computer, Healthcare, Autos & Parts and Internet sectors. While stocks have had one heck of a run, I believe valuations really matter. Current valuations are very high and there are multiple signs that the domestic economy may be slowing. Both issues, in addition to the upcoming election may have a dramatic impact on the market’s performance in the coming days or weeks. As such, I would not be getting overly excited about being exposed to this market.

As a reminder, my current allocation is not a recommendation. I still expect heavy volatility to continue for some time. Successful navigation through this environment will definitely require a fluid plan with all hands-on deck.

Regardless of what happens next, investors like you need to have a simple and yet solid financial plan that reduces RISKS, COSTS and TAXES while securing the necessary income you need to maintain your lifestyle throughout retirement.

If you don’t have a plan OR you’re not comfortable with the plan you have, call me today to get pointed in the right direction.

I’m Chad Kunc and that puts a wrap on the September 2020 Market Action Report. Thanks for joining me. It’s time for me to get back to the markets.

And that action starts, NOW!