Friggatriskaidekaphobia is the psychological term for fear of ‘Friday the Thirteenth’. Fitting, isn’t it, that one should fall in the year 2020 which has been such a Devil of a year it pains us to refer to it as 2020 AD.

For a year which should have been visionary, i.e. 20-20, instead is a year that can’t get out of its own way — even the rioters and looters ending up bringing havoc upon themselves. If 2020 were an automobile, Ralph Nader would declare it worse than the Corvair and the entire car would have been recalled by now. But for all the bad, 2020 has brought opportunity. We opened this newsletter using the word ‘eek’. Well, never before has there been a year so shot full of holes but still managed (thus far) to eke out substantial gains — most of this due to a sound under-lying economy.

This week started with the big news that a lot of people had been waiting for as Pfizer announced that they had a Covid-19 vaccine in hand — that was proving to have a 90% efficacy rate.

Markets danced in the street and pushed the Dow to a mid-day high with gains of >1300 points before settling to close at, a still impressive, +830 or so. Pfizer competitor Moderna has now also announced that they have a similar vaccine story. As we sometimes see on The Street, celebrations were then followed by a ‘yes, but’ moment. If Covid19 was no longer the dominant beast threatening our lives and lifestyles, that portion of the stock market that is / was invested in the new ‘stay-at-home’ economy might be in for a reversal. It was. Techs and Financials felt it most severely. But today is another day (as Scarlett O’Hara would say) and the flop may be flipping. Rising tides still raise all boats.

We can’t finish this week’s eLetter without a few words about the election(s). All in all, it seems to us that the markets got a better deal than they expected. A Biden win (now likely) is seen to be helpful in getting substantial stimulus funding. That’s a good thing because the markets love liquidity and they don’t really care what the source is. Secondly, having the control of the Senate in GOP hands will be taken as a stabilizing force and a preventative measure against the more extreme Democrat initiatives such as court-packing, adding states and killing off the filibuster.

We could be happier. But we’re happy enough.

Ron’s Market Minute – Markets are Doing What They Do- but 10x Faster!

You have probably heard someone mention, during the past six months or so, that ’10 years of change are happening in one year!’

Seems like that’s become a cliché’‌, but often clichés seem to endure because they’re mostly true. The seemingly overnight move of employee work-forces to ‘work-from-home’ work-forces pulled the very-much expected fracturing of a more digital work-force from the future to the now.

In-person activities such as home-buying, car buying, grocery shopping and schooling were forced online. And now many areas of our society that might have seemed to necessarily be ‘in-person’ have become digitized.

So, it seems that everything has happened much faster and more dramatically because of the crisis than during any previous disruption. Perhaps that why it seems reasonable to see markets go through a multi-year cycle in half a year.

From a distance, a chart of this year’s market activities looks amazingly like a chart of market activities from 2008 to 2013, during the financial crisis. That chart shows the same huge drop and then a rebound. And recently the value of the world’s traded markets hit $95 trillion, a new record, just as it did in 2013 at the end of the financial mess. 

‌The similarities to the market charts remind me of a technical analyst’s groups’ saying that says you can zoom in on any chart and make it scary, or zoom out and make it look much more placid.

In the end, what is true or false in markets often just depends on your timeframe. Investor behavior this year followed a course similar to that of the financial crisis- but followed that path in about one fifth of the time. 

Huge-a-mongous uncertainty whacked the markets almost overnight. And ALMOST as quickly, markets have started doing what they normally do very well- and that is looking ahead to what the future is likely to encompass.

For many of us, this takes some of the mystery out of the headlines that seem to ask ‘If the economy is so bad, why are markets so strong?’ It appears they are looking ahead to what may be much better times in the economy. We hope (and expect) they will be correct…  yet again.

 

Ronald P. Denk, CFP®
Investment Advisor
Denk Strategic Wealth Partners
10000 N. 31st Avenue, Suite C-262
Phoenix, AZ 85051
Phone (602) 252-8700
Fax (602) 252-8701
Toll-Free (877) The-Denk
www.denkinvest.com

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Ron Denk is a Registered Representative, offering investments through Lincoln Financial Securities Corporation, Member FINRA/SIPC.

Mr. Denk is also an Advisory Representative offering services through Denk Strategic Wealth Partners, a Registered Investment Advisor. Denk Strategic Wealth Partners is not affiliated with Lincoln Financial Securities Corporation.

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