First Half of 2020
At this time last year the markets had just experienced a substantial sell-off of about 20%. I ended my Ken’s Korner piece with “we see more opportunities today than we’ve seen in several years.” That proved to be quite prescient as many world stock markets increased 20% or more, including the US.
We also pointed out in our mid-year report that the third year of the four year presidential cycle historically has been the strongest. 2019 proved to be another example of this outperformance for the US stock market.
Looking ahead, we still see many long term themes and areas to invest but would expect volatility to increase. Corrections should be viewed as opportunities for those with at least a three to five year time horizon. We believe this secular bull will continue to confound the naysayers and continue the trend higher for many years to come.
I also wanted to point out that our clients did three times the number of SBL loans (Securities Based Loans) than our next highest year. These loans allow you to borrow against your non-IRA assets, so you do not have to sell positions, creating possible capital gains. Please call me or my assistant Carole for more details.
We continue to embrace innovation and change and view the many new and future innovations in technology, robotics, healthcare, energy and food as the backbone of our bullishness. The backdrop of low interest rates, unemployment and inflation are also positives. There are still many negatives as well but for the past 10 years this market has done a great job of “climbing the wall of worry.”
Thank you for your continued trust and confidence. We appreciate the opportunity to define and discuss personal goals and provide solutions for our great clients. We look forward to the future with optimism.
Best regards,
Ken
Views expressed are those of the author’s and are not necessarily those of Raymond James & Associates and are subject to change without notice. Information contained herein was received from sources believed to be reliable, but accuracy is not guaranteed. Information provided is general in nature, and is not a complete statement of all information necessary for making an investment decision, and is not a recommendation or a solicitation to buy or sell any security. Past performance is not indicative of future results. There is no assurance these trends will continue or that forecasts mentioned will occur. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success.
A line of credit backed by securities, such as a Securities Based Line of Credit, a structured line of credit or a margin account, may not be suitable for all clients and investors. Borrowing on securities-backed lending products or margin accounts and using securities as collateral may involve a high degree of risk, including unintended tax consequences and the possible need to sell your holdings, which may lead to a significant impact on long-term investment goals. An investor may lose more funds than he or she deposited in the account. Market conditions can magnify any potential for loss. If the market turns against the client, he or she may be required to quickly deposit additional securities and/or cash in the account(s) or pay down the loan to avoid liquidation. Clients and investors may not be entitled to choose which securities or other assets in his or her account are liquidated or sold to meet a call. The firm can increase its maintenance requirements at any time and is not required to provide advance written notice. Clients and investors may not be entitled to an extension of time on calls. The securities in the pledged account(s) may be sold to meet the collateral calls and the securities in a margin account can be sold to meet margin calls; the firm can sell the client's securities without contacting them. Increased interest rates could also affect LIBOR rates that apply to your line of credit, causing the cost of the credit line to increase significantly. The interest rates charged on a line of credit are determined by (i) the market value of pledged assets and the net value of the client's Capital Access account or (ii) the line of credit amount. The interest rates charged on margin accounts are determined by the amount borrowed. Please visit https://www.sec.gov/reportspubs/investor-publications/investorpubsmarginhtm.html for additional information. The proceeds from a Securities Based Line of Credit or a structured line of credit cannot be (a) used to purchase or carry securities; (b) deposited into a Raymond James investment or trust account; (c) used to purchase any product issued or brokered through an affiliate of Raymond James, including insurance; or (d) otherwise used for the benefit of, or transferred to, an affiliate of Raymond James. Raymond James Bank does not accept RJF stock or any securities issued by affiliates of Raymond James Financial as pledged securities toward a line of credit. Lines of credit are provided by Raymond James Bank. Securities Based Line of Credit and structured line of credit provided by Raymond James Bank, N.A. Raymond James & Associates, Inc., and Raymond James Financial Services, Inc., are affiliated with Raymond James Bank, N.A., a federally chartered national bank.
