Check out this month’s Market Update from David Reyes, The Retirement Architect
Hi. Today, I want to share with you the market. I don’t talk a lot about the stock market. When I do my workshops and teachings, I do. But I felt it was a really good time to give you my insights on what’s happening right now. We’ve had a bull market, the longest bull market ever now – over 10 years. Market has been over 330%, you know, since 2009. If I was going to give this a baseball analogy, we’re in extra innings. And so, I’m just concerned.
I do a lot of reviews for you out there, radio show listeners, people attend my workshops, people that are referred to me. And you have way too much risk in your portfolio. During the one week here recently in October, just recently, the Dow dropped 1500 points in three days. I mean, unbelievable. The market lost about 7%. The S&P 500 was up 9% year-to-date. It went all the way down to basically flat at 1%. You have the NASDAQ down 9%. You have NETFLIX down 15%. Amazon down 13%. These are big moves in one week. This is in a few days period.
So I want to make sure that you’re prepared for this type of volatility – that most of you are not. And, fortunately, the longer we’re into a bull market, the more complacent you become. And that’s when it’s dangerous. You always use the Warren Buffetism, “When other people are fearful, be greedy. And when others are greedy, be fearful.” And everybody is greedy right now. Everybody is jumping on the train of owning stock, especially technology stocks.
Right now, the S&P 500 is overweight by about 30%, meaning that 30% of the S&P value is technology. Every time we’ve had that type of overvaluation of technology in 2000, it was that number, we lost 80% in technology. In the Financial Crisis, we had about 25% of the value of the S&P 500 was financials. Financials lost 80%. Kind of rhyme and reason, here. We’re getting, now, 25-30% overvaluation in technology because everybody is jumping on technology.
Again, I don’t want to scare you but you are probably talking the next time we have a down move, a bear market, you’re talking 30, 40, 50, 60%. I know it sounds outrageous but it’s not. So I just want to make sure you’re protected. You know, we have a philosophy at our firm. “We want to participate and protect every thing we do.” Participant and protect.
If you want to reach out to me to talk more about your portfolio, your risk, trusts, taxes, we do a complimentary second opinion that’s very, very powerful. A lot of information. So just reach out to us. Give me a call and look forward to talking to you.