August 2021 Monthly Outlook – Tortoise and the Hare, Sometimes the Tortoise Wins

“We don’t get paid for activity, just for being right. As to how long we’ll wait, we’ll wait indefinitely.” – Warren Buffett

“ Patience is the calm acceptance that things can happen in a different order than the one you have in mind.” -David G. Allen

I start this report out with 2 quotes that reflect where I am in terms of the market and your portfolio.

While the stock market (S&P 500) has continued to climb, there are a number of factors facing the markets in the near-term that have me in a patiently waiting mode.

The first factor is that August is historically the weakest month of the year for stocks.  “August has been the 2nd worst performing month for the S&P 500 index over the last 30 years (1991-2020), losing an average of 0.2% (total return) over the period.”  (BTN research)

The second factor is that the market is WAY over due for even a mild decline.  “US equities have continued their stellar performance despite high valuations that have raised correction concerns. Following last week’s performance speedbump, the S&P 500 has persisted upward. It has now been 184 trading days since the last 5% S&P 500 drawdown. This marks the 15th longest period without a meaningful pullback and is significantly above the historical average of 97 days.” (Goldman Sachs)

Source: Goldman Sachs Global Investment Research. As of July 29, 2021.

The third factor I am watching is the market history during a new President’s 1st term.  This year it is especially important as the economic reopening is threatened by the spread of the Delta variant of Covid, primarily in the unvaccinated population.  The other issue is the Infrastructure legislation currently working its way through Congress.  While the Senate appears poised to approve the bill, the House will not even address the bill until September and there are members in both parties not happy with the Senate bill.

Having said all of the above, we continue to look for opportunities that can be taken advantage of.  For example, during the last week of July a number of major companies reported earnings, and while reporting phenomenal numbers, in almost every case the stock prices for these companies fell.  We saw this as an opportunity to invest in high quality companies like Apple, Amazon, Google, Facebook and a few others, at discount prices.  Time will tell if I was correct but I feel these are wonderful long-term investments.

Please let me know if you have any questions on this report.

August 2020 Calendar of Events   (comments and suggestions always welcome)

                August is National Immunization Awareness Month – How ironic given the Covid-19 virus and so many of our fellow citizens refusing to get vaccinated

August  8th        My birthday!   It is also International Cat Day.  Meow to all the cat lovers out there

August 16th      National Tell a Joke day – we can all use  some humor these days

August 24th      National Waffle Day – yum           

August 26th      Women’s Equality Day – as the son of a single mom and the father of 3 wonderful daughters and 2 amazing granddaughters, I support improving quality for women in all areas.

Please stay safe and well.


Sources: Goldman Sachs, Oppenheimer, Macro Analytics, BTN Research

Although information herein has been obtained from sources deemed reliable, its accuracy and completeness are not asserted. All opinions and estimates included in this report constitute the judgment of the financial advisor as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.

Investing involves risk and you may incur a profit or a loss. Diversification does not ensure a profit or ensure against a loss. There is no assurance that any investment strategy will be successful.  Past performance is no assurance of future results.

Please consider the charges, risks, expenses and investment objectives carefully before investing. Please see a prospectus containing this and other information. Read it carefully before you invest or send money.

Information provided should not be construed as legal or tax advice.  You should discuss any tax or legal matter with the appropriate professional.

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