Stocks shook off the 5.9% S&P 500 Index drop a week ago Thursday by gaining three days in a row before fading a bit at week’s end. While researching and reading this week, two charts stood out to me that tell us quite a lot about how investors have reacted during this volatile market and what could be next.
Incredibly, nearly a third of all investors over 65 years old sold their full equity holdings. With stocks now back near highs, this is yet another reason to have a plan in place before trouble comes, as making decisions when under duress can lead to the exact wrong decision.
As shown in the above chart, according to data from Fidelity Investments, nearly 18% of all investors sold their full equity holdings between February and May, while a much higher percentage that was closer to retirement (or in retirement) sold. Some might have bought back in, but odds are that many are feeling quite upset with the record bounce back in stocks here.
Along these same lines, investors have recently moved to cash at a record pace. In fact, there is now nearly $5 trillion in money market funds, almost twice the levels we saw this time only five years ago. Also, the past three months saw the largest three-month change ever, as investors ran to the safety of cash. If you were looking for a reason stocks could continue to go higher over the longer term, there really is a lot of cash on the sidelines right now.
Stocks are Overbought
Last, I noted a few weeks ago that the extreme overbought nature of stocks here is actually consistent with the start of a new bull run, not a bear market bounce, or the end of a bull market. Adding to this, the spread between the number of stocks above their 50-day moving average and 200-day moving average was near the highest level ever.
Looking at other times that had wide spreads, they took place near the start of major bull markets. Near-term the potential is there for a well-deserved pullback, but going out 6 to 12 months, stocks have consistently outperformed historically.
About Integrated Financial Group
My firm specializes in working with people that experience what we call “Sudden Income.” Typically the income came from one of these events:
1) Accessing and Managing Retirement Assets
2) A Performance Contract (Typically a Sports or Entertainment Contract)
3) Divorce Settlement
4) An inheritance or Insurance Payout
5) Sale of a Business or Stock Options
6) A Personal Injury Settlement
I believe the unique nature of these events requires specialized professional experience, empathy, and communication to deal with both the financial changes and the life changes that inevitably come with them.
My clients value my ability to simplify complex strategies into an actionable plan. They also appreciate that I am open, non-judging, and easy to talk to about their dreams and fears. Each client defines financial success differently and my goal is to guide them from where they are now to where they want to be. As my client’s advisor, my goal is to provide them with a lifetime income stream, improving returns, protecting their funds, and managing taxes.
Firm Specialties:
- Retirement Planning For Business Owners & Executives
- Woman’s Unique Financial Planning Needs
- Professional Athletes
- Investment/Asset Allocation Advice
- Estate Planning
- Risk Management
- Strategic Planning
Kevin was listed in
The Wall Street Journal as “One of the Financial Advisors In The Southeast That You Need To Know”
Kevin was listed in Forbes Magazine’s Annual Financial Edition as a Five Star Financial Advisor
Kevin has been awarded the FIVE Star Professional Wealth Manager in Atlanta Magazine in 2012, 2014, 2015, 2016, 2017, 2018, and 2019.
Award based on 10 objective criteria associated with providing quality services to clients such as credentials, experience, and assets under management among other factors. Wealth managers do not pay a fee to be considered or placed on the final list of Five Star Wealth Managers.
KEVIN GARRETT, AWMA, CFS
Integrated Financial Group
200 Ashford Center North, Ste. 400 | Atlanta, GA 30338
Phone | 770.353.6311
Email | kgarrett@intfingroup.com
Website | kevingarrettifg.com
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