Market Data Bank

1Q 2020


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COVID-19 ENDS S&P 500's LONGEST BULL RUN

The S&P 500 stock index closed at an all-time high on February 19, 2020. Then Covid-19 abruptly ended the 126-month bull market, the longest bull run in modern history. By March 23, stocks lost 34%. Despite a surge at the end of the quarter, the S&P 500 posted a -19.6% loss in the first quarter of 2020.


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U.S. STOCKS DOMINANT OVER FIVE-YEARS

But applying the rubrics of modern portfolio theory requires judgment from a professional and personal attention because the rules of MPT are changing.

For example, emerging markets and foreign stocks have underperformed for years.


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ENERGY WAS WORST SECTOR IN Q1

Energy stocks lost half of their value in the quarter. With stay-at-home orders mandated across the globe and U.S., cars, planes, and trains came to a near-standstill, resulting in a global oil glut. In contrast, tech, healthcare, consumer staples, and utilities sustained losses about a quarter the size.


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INDEXES TRACKING 13 ASSET CLASSES

Over the five years ended March 31, 2020, the S&P 500, the growth engine of a diversified portfolio, was the No. 1 investment across a broad range of assets - despite the Covid-19 bear market in the final three months of the period. Even in the shadow of the coronavirus bear market, the five-year period was not terrible for stocks.


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WALL STREET'S PREDICTIONS, 2007-2019

This scattergraph shows Wall Street strategists' performance based on their sector predictions in Barron's for 13 years. If Wall Street had been correct, the black dots would fall on the red line or cluster around it. The randomness shows Wall Street cannot predict the best and worst sectors


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CONSENSUS FORECAST

The 60 economists surveyed in early April by The Wall Street Journal expected the U.S. economy to shrink this quarter by an unprecedented -25.3%. However, they expected a v-shaped recovery, with +6% growth in gross domestic product in the third quarter of 2020 and +6.6% growth in the fourth quarter.

Past performance is never a guarantee of your future results. Indices and ETFs representing asset classes are unmanaged and not recommendations. Foreign investing involves currency and political risk and political instability. Bonds offer a fixed rate of return while stocks fluctuate. Investing in emerging markets involves greater risk than investing in more liquid markets with a longer history.

 

 

 

 

 

Disclaimer

Howard Materetsky, Ira S. Materetsky CFP®, Matt Welsh and Mark Furman offer advisory products and services through Materetsky Financial Group, a registered investment advisor. Securities offered through Private Client Services, Member FINRA/SIPC. Materetsky Financial Group is not affiliated with Private Client Services. Tom Gau offers advisory products and services through Materetsky Financial Group, a registered investment advisor.

Materetsky Financial Group advisors are registered in the following states: AL, AZ, CA, CO, CT, DE, FL, GA, HI, IL, MA, MD, ME, MI, MN, MO, NC, NH, NJ, NM, NV, NY, OH, PA, RI, SC, VA, WA, WI, WV, and WY. No offers may be made or accepted from any resident outside the specific states referenced.

SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. The firm is not engaged in the practice of law or accounting. Tom Gau has been featured as one of the top 100 independent financial advisors in Barron’s in 2008, 2009, 2010, 2011, and 2013. The Barron's rankings are based on data provided by over 4,000 of the nation's most productive advisors. Barron’s uses a deeply researched, quantitative and qualitative approach to identify the top 100 independent financial advisors, which represents 2.5%. Factors included in the rankings are a minimum of 7 years in the business, client retention, assets under management, revenue produced for the firm, regulatory record, quality of practice and philanthropic work. Investment performance isn't an explicit component because not all advisors have audited results and because performance figures often are influenced more by client’s risk tolerance than by an advisor's investment-picking abilities. Third-party rankings and recognition from rating services or publications are no guarantee of future investment success. Working with a highly-rated adviser does not ensure that a client or prospective client will experience a higher level of performance. These ratings should not be construed as an endorsement of the adviser by any client nor are they representative of any one client’s evaluation. Generally, ratings, rankings and recognition are based on information prepared and submitted by the adviser. Barron’s does not receive any compensation from this advisor in exchange for ratings. For more information on these ratings, please contact the financial advisor or www.barrons.com.

 
 
 

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