January 17, 2020

What About…

Phil Albitz, CFP®
Phil What About

Happy New Year everyone…

With this video, I’m going to talk about what’s going on and make some observations on what we see for the future under to existing circumstances. Now these aren’t forecasts.

There is an old saying that goes something like this: Forecasts tend to tell to tell you more about the forecaster than they do about the future. Keep that in mind because no one can predict the future.

So what about impeachment? Those of us who remember Nixon and Clinton impeachments would probably agree that this one doesn’t have the same feel. At least not yet. Maybe that will change. Thus far the stock market has shrugged it off. Again, maybe that will change.

There is an election this year…since nobody can be sure who will be facing off in November, the market is agnostic. Closer to the summer, we’ll see the market react to the policies floated by the candidates. If a candidate is selected that has a negative bias toward business, I guess you could anticipate the market’s not going to like that. The same can be said if it looks like we’ll see a big tax increase. Too early to sweat it now so let the political pundits chatter but don’t make any investment decisions based on politics now.

What about stirring up the hornets’ nest in the Middle East? We are seeing oil prices rise, and Gold prices rose, too. That is a fairly typical reaction that we’ve seen in the past to these situations. When the news came that Iran shot missiles into Iraq, the futures for the stock market quickly fell 450 points. When it started to come clear that all out war wasn’t breaking out, then things settled down. But that event, even though some kind of response was expected, shows how quick selling pressure can occur. And if things fly off the rails, all bets are off.

What about interest rates and the inverted yield curve that we saw in 2019? Well, in my view rates are trying to go up and the Fed is doing its best to try to keep them down. There was a canary in the coal mine issue back in September when the Repo market went bonkers for a few days and overnight rates jumped to 10%. The Fed stepped in and basically provided all the liquidity the banks needed. We read these tea leaves to say, “watch out for a spike in rates sometime this year.”

Lastly, what about the mirror image results in the stock market from the end of 2018 to the end of 2019? I think we must ask ourselves that with all this stuff going on, “why is the market near all-time highs?” As Clark Kent, AKA Superman, might say to his little buddy “that’s the question Jimmy.” Let’s just say if we had a correction in the coming months, it shouldn’t be a shocker. A 10% correction would mean close to 3000 points down on the Dow. That won’t be pleasant. How do you deal with it? This way: On December 31, 2018, just about a year ago the Dow was at 20% lower than it is today. Pullbacks won’t be a disaster. Keep your plan of action with a view toward a longer than three-month time period. Keep your plan of action based on your goals and objectives.

We’re all human and we generally look at all the things that can go wrong. I’ve said this many times: More things can happen than will happen and everything that happens will not be bad.

Let’s look to the future with anticipation and excitement not apprehension and trepidation.

2020 will be a good year…let’s keep it healthy and happy.

Until next time, I’m Phil Albitz, thanks for watching.

The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change with or without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing. The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and NASDAQ.

Phil Albitz

CFP®

Phil Albitz is a veteran Financial Advisor and Chief Investment Portfolio Manager for our Greater Value Accounts. Phil is also a CERTIFIED FINANCIAL PLANNER® and has been registered in the securities business since 1982. His strength is in stock market analysis, portfolio design, risk management and retirement income strategies. Phil works closely with our clients to help them meet their goals and objectives in a personal and professional manner. He is an avid sports fan and spent many years coaching his two sons, Clete and Vance, in basketball and baseball. In his free time, he enjoys playing with and watching his six grandchildren as they grow and mature. Phil was born and raised in Southern California and resides in Torrance with his wife, Velma. In 2024, they celebrated their 48th year of marriage.

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