Educate, Encourage, Empower

First Quarter Earnings 

In the week ahead we expect earning reports from a well-rounded group of companies that represent or impact every aspect of our economy. This will give us a clear indication of the underlying health of the economy, impact of the virus, and how companies see themselves performing for the rest of the year.

Do you know the difference?

Traditional Individual Retirement Accounts (IRA), which were created in 1974, are owned by roughly 33.2 million U.S. households. Roth IRAs, however, were created as part of the Taxpayer Relief Act in 1997, are owned by nearly 22.5 million households.1

Both are IRAs. And yet, each is quite different.

Will this current Stock Market Rally continue?

First of all, as with everything market related over the last few months – anything could happen and we would not be surprised! There is no historical precedent for current events to aid in determining what the future holds with the stock market. But we can make some observations:

From February 20 to March 23 the S&P 500 dropped by 33.67%. Then, rose by 28.48% from March 23 to April 17. This V-shaped market bounce was largely unrelated to the economic and medical news occurring at the same time. So, where does the market go from here?

• Near Term Volatility – We use a technical indicator called Bollinger Bands to help us analyze where the market may move in the coming days or weeks. Bollinger Bands track the upper and lower Standard Deviation level of the Moving Average Price of a Security. In plain English, this simply means that you can see how undervalued or overvalued a security or the market as a whole is. Historically, if the price of the security touches the top or bottom of the Bollinger Bands you will see a movement in the opposite direction in short order. Take a look at the chart below of the S&P 500 over the past year:

Focusing on Your Strategy During Turbulent Times.

Investors are people, and people are often impatient. No one likes to wait in line or wait longer than they have to for something, especially today when so much is just a click or two away.

This impatience also manifests itself in the financial markets. When stocks slip, for example, some investors grow uneasy. Their impulse is to sell, get out, and get back in later. If they give in to that impulse, they may effectively pay a price.

What’s the difference? What do these terms mean for you?

The COVID-19 outbreak has put tremendous pressure on stock prices, prompting some investors to blindly and indiscriminately sell positions at a time when the entire market is trending lower. Worried investors believe "this time it's different." When the market drops, some investors lose perspective that downtrends – and uptrends – are part of the investing cycle. When stock prices break lower, it's a good time to review common terms that are used to describe the market's downward momentum.^1,2

Things you can do for your future as the year unfolds.

What financial, business, or life priorities do you need to address for the coming year? Now is a good time to think about the investing, saving, or budgeting methods you could employ toward specific objectives, from building your retirement fund to managing your taxes. You have plenty of choices. Here are a few ideas to consider:

Now that we have gone over how Creekmur Wealth Advisors approaches, analyzes, and acts on investing, let’s put it all together. In this part, we will examine an individual case study; we will look at one exchange-traded fund and explain how we make an investing decision based on those three steps of analysis. Today, we will be diving deep into the ETF named CIBR!

Now that you’ve had a glimpse at our process for bringing in new investments, it is time to look at a more continuous investing responsibility of our firm: managing our current portfolios. This involves using the various investing actions that can be taken to continuously update and tweak our current holdings. This helps to ensure that our models reflect the current markets and maintain our goal of outperformance. Let’s take a look at these options:

How an individual or advisor conducts an analysis for a potential investment is one of the largest contributors to the long-term success of that particular investment. If someone has a well thought out analysis process, the odds of investing success could greatly increase.

In this next section of our investing series, we will be examining the philosophy side of investing. There are essentially two schools of thought: fundamental and technical. These two approaches to investing are often placed on opposite ends of the spectrum, but most investors fall somewhere in between the two schools. Let’s dive in!