The Coronavirus Pandemic will begin to fade into our rear-view mirror, perhaps by this fall. A crisis situation so often creates opportunities also. The Federal Reserve moved quickly by cutting rates twice early on to help combat the effects of the Coronavirus Pandemic on the markets which, in turn, adversely impacted the financial sector, specifically banks. The financial sector as a whole has strong balance sheets. With equity valuations for this group currently down over 30% and a single digit PE multiple for the entire group, I believe valuations look attractive. Considering the record stimulus package set forth by the government in response to the COVID-19 Pandemic, the economy may recover more rapidly than many envision. As the economy recovers, the Federal Reserve will once again begin to raise interest rates in an effort to normalize rates. When this happens, it will carry the financial sector with them. Overweighting Financials at this time should provide a better dividend yield than can be found in CDs and other fixed income investments at this present time. In my opinion, the dividend yield will serve as a nice reward while patiently waiting for this sector to recover.

Any opinions are those of J. Greg Garner and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Asset allocation and diversification do not guarantee a profit nor protect against a loss. Dividends are not guaranteed and must be authorized by the company’s board of directors.