February Market Commentary

February 17, 2021

As January comes to an end, the financial markets have experienced an up-an-down start to the year. Markets were up significantly until the last two trading days of the month, when the market gave up all of its gains and turned negative for the year. It is important to reiterate that the market being “red” for the month of January does not necessarily spell doom for the industry. In fact, the last few times the market had a negative January, it ended up finishing positive for the year.

This chart depicts an interesting situation: The S&P 500 has actually been negative for the month of January in five of the last seven years, and in each of those instances the market finished positive for the year. Bad months happen, and the best way to stay on course to reach your goals is to stay calm and follow the plan.

The reasoning for this decline is obviously nuanced and there is no clear-cut explanation as there was last year during the beginning of the COVID-19 Pandemic. Many link this to the ongoing situation going on with GameStop stock and its manipulation by online traders. Hedge Funds and institutions on the other side of the trade are being forced to come up with money to cover their positions. As a result, they are likely selling their most valuable positions simply to come up with the necessary amount of cash.

During this event we will be diving deep into the markets, sectors of the markets we like, we will talk about how we filter and pick the holdings, and we will cover our outlook under the Biden administration.

As always we are on standby to help answer any questions you have about your portfolio.


Tyler Nowotny