Trick or Treat?

The S&P 500 declined 4.8% for the month of September, representing its sharpest monthly decline since March 2020. Making matters appear even more ghoulish, October has infamously brought us the Bank Panic of 1907, the Stock Market Crash of 1929 and Black Monday 1987. Yet, here we are today achieving all-time highs at the heels of a global pandemic. Everyone is eager to learn the answer to a popular question; is this is a sign of what is yet to come? At the top of the market cycle, it's not what we own that matters. It’s what we avoid that keeps investments together when the levee breaks. This means avoiding all the sectors that were decimated during the pandemic, some of which were achieving all-time highs despite being fully shut down and legally inoperable.

We’re always asking if this is the beginning of the worst. My answer is ... not if you are boring. Boring means owning companies or sectors that are immune to a recession or recession beneficiaries. For example, when human beings are afraid, we instinctively rush to the super market and buy groceries and as much toilet paper as the signs will allow us! By focusing on avoiding economic, moral and social hazards, it allows us to have clarity at the top of the market cycle. Clarity means the companies we own will more than likely not decline in earnings as we experience economic hardships. Uncertainty can create great opportunity – as long as we are prepared for it.

Thank you from the bottom of our hearts and the opportunity to serve you.

Best Regards,

Any opinions are those of Jack W. Kennedy and not necessarily those of RJFS or Raymond James. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Past performance is not indicative of future results. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Sector investments are companies engaged in business related to a specific sector. They are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification.

All expressions of opinion reflect the judgment of Raymond James & Associates, Inc. and are subject to change. There is no assurance any of the trends mentioned will continue or that any of the forecasts mentioned will occur. Economic and market conditions are subject to change. Investing involves risk including the possible loss of capital. The S&P 500 is an unmanaged index of 500 widely held stocks. It is not possible to invest directly in an index. The market performance noted does not include fees and charges which would affect an investor’s returns. Past performance may not be indicative of future results.

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