Market Update December 13, 2021
Patrick Traverse CFP? EA CEPA?
Owner Founder at Breakaway Financial Group LLC
The Big Change?
What is it??
Lance Roberts of Real Investment Advisors highlighted an interesting point over the last week as follows. “Apple’s stock is up over 10% in the last five trading days. In the last month, its market cap increased $400 billion and is now approaching $3 trillion. To put that in context, consider the $400 billion gain in market cap over just the last month is more than the total market cap of the world’s 20th largest company, Walmart ($380 billion).”*
Why does it matter?
A growing category of Apple’s revenue is coming from services rather than just physical products like the iPhone, Mac, and iPad.** This is in line with what Ray Dalio (Founder of the world’s largest hedge fund) said in his most recent book.?
“For Example, while ages ago agricultural land and agricultural production were worth the most and that evolved into machines and what they produced being worth the most, digital things that have no apparent physical existence (data and information processing) are now evolving to become worth the most. This is creating a fight over who obtains the data and how they use it to gain wealth and power.”***?
As the economy evolves, it is imperative to pay attention to which investments have a lot of upside for future growth. We plan on investing in growing markets (such as data and information processing) at times where they are in a positive trend. This will be done with the clients suitability in mind while also limiting long-term investments in contracting markets.?
Wall Street pauses after sharp rally this week
What is it?
“U.S. stock indexes slipped on Thursday after three straight days of gains following positive updates on the Omicron coronavirus variant, with focus now turning towards economic data for clues on the Federal Reserve's policy decision.”****
“After falling as much as 5.24% since a record high hit on Nov. 22, the S&P 500 index (.SPX) has recouped nearly all its declines, now trading 1.2% below its all-time peak.”****
Why does it matter?
The markets have shifted over the last month or two. Stocks and commodities are no longer as overbought as they were. As markets near all-time highs, we will continue to adjust our portfolios as things become overbought (accelerate too high too fast) or fall out of favor (lose their positive trend).?
Other articles I found interesting this week:
Current 401(k) portfolio
Our last portfolio reallocation: 10/11/2021.?
Want more information?
The weekly market update provides a window into the process we use in our investment management process. At MoneyCoach, we believe markets are always changing and require a nimble yet data-oriented approach.?
Our process attempts to identify trends and momentum in the financial markets. With that information, we align our clients’ portfolio accordingly in the hope to help our clients accomplish their life goals while attempting to lower the risk of a large drop in their portfolio.
Sources:
*Lance Roberts. “Real Time Commentary”. 12/9/2021. RIA Pro. https://riapro.net/dashboard
**Statista. “Share of Apple's revenue by product category from the 1st quarter of 2012 to the 4th quarter of 2021”. 10/01/2021. Statista. https://www.statista.com/statistics/382260/segments-share-revenue-of-apple/
***Ray Dalio. “The Changing World Order”. Page 31. 11/01/2021. Avid Reader Press.?
****Devik Jain and Shreyashi Sanyal. “Wall Street pauses after sharp rally this week”. 12/9/2021. Reuters. https://www.reuters.com/markets/europe/wall-street-set-take-breather-after-sharp-rally-this-week-2021-12-09/
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