By LouAnn Schulfer, AWMA®, AIF®
Accredited Wealth Management Advisor^SM
Accredited Investment Fiduciary®

There are times we say, “I remember exactly where I was when……”  For me, I remember exactly where I was when the markets began falling in February of 2020.  Until then, we had a strong 2019 and previous decade’s long bull run.  I was on my way home from a conference:  we’d stopped in Tennessee and thought we’d have a fun evening out. The closer we’d get to 3:00, the more we kept hitting refresh on our screens watching the sell-offs at market close that day, the next, and onto the weeks to follow.  Our  attention to the markets is two-fold:  analyzing the equity positions that our clients hold as well as a gauge of what is going on in our country.  Since we are not stock-brokers, we utilize a variety of investment options. In fact, I only had one client who was near panicking and we were able to talk through what comprised her portfolio and prevent what would have been the mistake of selling out.

More enjoyable was the 5 1/2 months following March 20^th when equity markets reversed their positions and hit new all-time highs.  It’s fun to watch winners run!  But we know there are areas of the economy still struggling from the mandatory shutdowns and partial re-openings and to many, that’s perplexing.  Back to the point of the article The S&P is Not GDP. The S&P 500 is a measure of large publicly traded companies while Gross Domestic Product is a measure of the entire economy.

Digging in to the S&P, we find that about half of the companies are well positioned for the pandemic. As we’ve seen sales increase for many large retailers and a sharp rise in technology demand due to work from home orders and schools moving virtual, profitability of related companies increases and share values rise.  Conversely, when salons, bars, restaurants, and entertainment venues shut down, it is not reflected in the S&P 500.  This is one reason why we’ve seen the stock market recover faster than the economy.  Going forward, the question is:  can the reopening continue?  Or will the virus impede in the future?  If we can continue moving through phases of reopening, progress can continue, and we may continue to see positive overall returns amidst phases of the pandemic.

LouAnn Schulfer is co-owner of Schulfer & Associates, LLC Wealth Management and can be reached at (715) 343-9600 or louann.schulfer@lpl.com.  www.SchulferAndAssociates.com
Securities and advisory services offered through LPL Financial, a Registered Investment Advisor.  Member FINRA/SIPC.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.