Although uncertainty continues the markets posted a solid week last week with a new tide of deescalating trade tensions. The past few years, the story has been that the growth was concentrated in the top 7 stocks and now we are seeing breadth of growth. This means the entire market is having some gains to the upside although we are still correcting some overpriced stocks. Last year we had an above average growth rate fueled by solid AI spending and a wave of immigration. This year we received a negative GDP which shows us that the economy is contracting. We are experiencing the highest tariffs in nearly a century. We have a new unpredictability in U.S. policy making. When we look at the soft data of how people feel it is all mostly negative. More of your emotional bear market. Some CEO sentiment is to hold off on hiring, however, outside of you UPS there were not any big layoffs announced. We're seeing the repositioning of the Mag 7, high revenue and earnings is now expected, we were overpaying for those stocks because we felt that their performance was outstanding and now, we just expect them to give us those returns so we're not paying up for that anymore. We closed April with one of the best rallies since COVID that is proof that when we set up an investing strategy and we see headwinds, unless there are reasons in your personal financial situation to go to cash we stay in the markets. Volatility which was escalated has now come down and the VIX is under 20. More recession fears are mounting. However, when we look at bank outperformance, that doesn't signal an impending recession. Generally, when we're seeing a recession on the horizon, you'll see bank stocks underperforming. Today’s jobs report was better than expected. The largest employer in the US is small businesses, this is at odds with the Chamber of Commerce’s assertion that small businesses are fearful of how the tariffs will affect them. The markets prove that they are efficient. In the face of uncertainty, it is always a good idea to stay optimistic, especially when investing in the US markets. Now is a good time to assess the risk that you are taking that you don't know you're taking.
If we haven't met to talk about what you would do in a long-term care situation that might be an appointment that you would like to schedule. If you have aging parents perhaps, we should sit and discuss your plan for how their care will be handled and how that will impact you and them financially. If you haven't had this conversation with your parents, you may be surprised at a time that you are also dealing with the emotional stress of parents who need more care than you can provide. Americans are aging and we don't have the social and family structures we did in the past that allowed for neglecting a care strategy. The cost of aging in America is growing, this is a risk you may or may not have had a look at and one of the reasons that at Moonshot Financial Group we orient with helping our clients through life's needs for financial planning. I have seen that having or not having these open conversations with your parents or with yourself will be impactful to your overall financial plan. Ask yourself, do you want to be a burden on your adult children? Could they even afford your care if they wanted to? Family conversations around the inevitable situations that we may face are bigger financial risks to my clients than market financial gyrations.
Do you have life insurance? Do you need it? Have you ever had a thoughtful look at this? If long term care and life insurance needs planning is something that you'd like to have a conversation about, we'd love to schedule you for a planning meeting.
If you have life insurance, is it enough? How will it work? Who is the beneficiary? Surprisingly many people don't understand how their employer life benefits will work. In many cases if you've been with an employer for an extended amount of time you may have an old beneficiary that doesn’t make sense for you to have anymore. These are risks that I see my clients take that they don't even realize they're taking.
If the recent market gyrations had you rattled perhaps you understand that there are things in your finances that you haven't planned for and that's scary. I advocate for families to assess what might be coming their way before you have emotional stress attached to those situations. If you had to take care of your aging parents, are you prepared? Do you have a plan for who will care for you?
Keep your financial planning personal, will your money be spent on what you feel is appropriate when it comes to care for physical or mental limitations you or your parents may experience?
When we control what is in our control and we plan for the unexpected that manages risk in our emotional and financial lives.
I founded Moonshot to help with those scenarios. My passion is for my clients to live an informed financial life, and we help them navigate the situations they face.
Until next time.
Cynthia Luna
This material is for informational purposes only. It represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. It is not guaranteed by any entity for accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any individual investor.