Fluent Financial Market Update August 6, 2020

Fluent Financial Market Update August 6, 2020

We would like to officially announce the Fluent Financial App!

  • Now available for free on both Apple & Android
  • Search for “fluentfinancial” (all one word)
  • Login information is the same as your Orion Client Portal
  • If you do not have a login, let us know and we will send one to you!

 

 

  • The current market rally is a battle between the “haves” and the “have-nots”
  • Cap versus Equal Weighted Indices:  Why it matters in our performance
  • The worst may be behind us but now the speed of recovery is what matters

S&P Performance highlights the “haves” versus the “have-nots” within the Index

  • “Cap Weighted” Indices base the weighting on company size
  • “Equal Weighted” Indices divide equally the 100% weighting across the number of companies
  • The S&P 500 is a “Cap-Weighted” Index (top 10 stocks are more than 25% of the Index)
  • The 10 largest companies in the Index are 35% higher than when 2020 began
  • The remaining 490 stocks in the index are 10% lower (on average)
  • There are approximately 36 companies in the index that are down 50% or more YTD
  • There are another 130 companies down between 20% and 49%
  • YTD, One-third of the index has lost 20% or more while only 35% are positive

Feb 19 th through July 31 st Cap Weighted S&P is outperforming the Equal Weighted by 6.32%

What will be the speed of recovery?

  • The speed of a recovery remains unknown
  • We feel that the worst of the economic damage is behind us
  • Over the next ten months (by June 1, 2021), we expect the following to occur:
    • The election results, removing some market uncertainty
    • A COVID-19 vaccine that is widely available
    • 2021 Summer travel will unleash pent up demand
  • The Cold War with China is expected to continue and escalate for the foreseeable future

Stay safe and thank you for your faith and trust in Fluent Financial.

 

Sincerely,

 

Mitch Kramer and the Fluent Financial Team