September 8, 2020 Fall and an Election Approach

Market Update – September 8, 2020 Fall and an Election Approach

The stock market enjoyed a strong, albeit surprising rally in August. All the major indices recouped their pandemic-related losses and briefly reached new highs. The Dow Jones Industrial Average (DJIA) had its best August since 1984. Given that, we are not surprised that the market pulled back while volatility increased at the end of last week.

Stocks, particularly technology-related ones, have been rising so quickly that investors appeared to take some profits to start the month of September. The good news is that the selling came on relatively low volume, which indicates that this was not a market panic. While August turned out to be less volatile than expected, last week was a good reminder that markets tend to correct themselves, and those corrections are usually swift.

Nevertheless, we recommend that you sit tight and disregard this day-to-day volatility as much as possible (unless, of course, your investment goals or objectives have changed). If you had panicked back in March and sold when the market was reaching a trough, you likely would have missed out on the ensuing rally that continued through the summer. Remember – it is time in the market that matters, not trying to time the market.

In our last market update we were a little early with our prediction of increased volatility, but we do want to remind you that September and October are typically weak months in the market, and this year appears to be following that trend. Historically, these months can also be quite volatile. According to LPL Financial, dating back to 1950 there have been more 1% swings in the S&P 500 during the month of October than any other month.

Four major themes will likely continue to dominate the headlines, influence investor sentiment and drive the markets: • The economic recovery. • COVID-19 and the race to develop a vaccine. • The current state of social unrest. • The upcoming election. Investors will also pay close attention to Congress as they try to reach an agreement on another stimulus plan and funding the government as the September 30th fiscal year-end approaches.

Securities are offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment Advisory Services are offered through Raymond James Financial Services Advisors, Inc. Cygnus Asset Management, LLC is not a registered broker/dealer, and is independent of Raymond James Financial Services.

We are certainly living in interesting times, but the markets seem to find a way to tune out much of the noise and let the fundamentals drive. For example, the summer rally was aided by corporate earnings that far exceeded expectations, especially among many of those technology stocks that sold off last week. This gives us hope that the economy will continue its recovery and that stocks will continue to perform well going forward.

We continue to urge you to focus on the long-term, as we do, and consider any volatility and market pullbacks as short-term events that should largely be ignored. We constantly monitor client portfolios and adjust as circumstances dictate.

Enjoy the soon-to-be cooler weather, stay safe and healthy, and, as always, please contact us with any questions or concerns.

Sincerely, Lisa

Lisa McIntire Shaw, CFP®, CIMA® Managing Partner

6805 Morrison Blvd., Suite 380 Charlotte, NC 28211

Investing involves risk and you may incur profit or loss regardless of strategy selected, including diversification and asset allocation. Past performance my not be indicative of future results. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Expressions of opinion are as of this date and are subject to change without notice.