Updated: Jul 26
SUMMARY. Fears of second wave Covid-19 continued as cases over all continued to rise although rate of deaths declined. Our focus remains on vaccine data forthcoming since we believe it will drive economy activity.
INVESTMENT IMPACT. During the week we reduced our equity holdings slightly with no major changes in our thinking as equity levels remain lower than normal. However, we recognize the polarity that exists between some sectors valuation wise. Some sectors in our view are at bubble like levels (tied to Federal Reserve liquidity) where speculation is high while others tied to economic reopening not nearly so. Our model equity exposure is in those names with compelling valuations vs paying for growth. We expect lower than normal model equity exposures until we gain more visibility on vaccines. Going into Fall, election uncertainty may be reflected in higher volatility especially in those sectors that hold high valuations. We remind clients Fed liquidity driven markets can remain elevated for a time but since growth isnt free eventually a catalyst arises reseting valuations.
Our model portfolio performance has been updated on our website as of 6/30/20.
For more insights see our website and disclosures found there at BCA. As always contact us for further explanation of how these events can affect your finances. To unsubscribe from our newsletters & website please email us with "unsubscribe" in the subject.