FXStreet reports that differences in age cohorts’ attitudes toward the stock market may be at play, according to Liz Ann Sonders who advises reacting to a full market cycle condensed into a few months by rebalancing rather than trying to anticipate the market’s short-term peaks and valleys.
“Since June 8, which was the most recent peak, the S&P 500 initially suffered a -7.1% pullback through June 11, followed by a 4.3% rally through June 23, and another selloff since then of -3.9%. The most recent peak in the S&P 500 corresponded to the point at which COVID-19 cases shot up again—likely not coincidentally.”
“The peak in the S&P 500 also came within the same time frame as the recent peak in the Federal Reserve’s balance sheet (which has had two consecutive weeks of slight declines). Related, the peak in the S&P 500 also came just after the peak in the 13-week percentage change in M2 money supply. In essence, the ‘shock and awe’ stage of Fed policy announcements is, for now, in the rear-view mirror.”
“I think there is a relationship between the virus and investor sentiment in terms of age cohorts. Much of the speculation in the stock market over the past few months has been concentrated among younger/newer investors and traders.”
“We’ve been recommending that investors remain at their long-term strategic equity allocations; but ‘react’ to the larger swings by considering rebalancing more frequently. This allows portfolios to ‘stay in gear’ by trimming into strength and adding into weakness; vs. trying to time short-term peaks and troughs (which is always extremely difficult).”
© 2000-2020. All rights reserved.
This site is managed by Teletrade D.J. Limited 20599 IBC 2012 (First Floor, First St. Vincent Bank Ltd Building, James Street, Kingstown, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at firstname.lastname@example.org.