SUMMARY. The continued election and media noise regarding covid-19 and the use of vaccines has continued to cloud the opportunities of re-opening. That noise will continue up until the election it seems barring a vaccine break-through.
INVESTMENT IMPACT. The large disparity between value and growth stocks (see prior newsletter) has continued in part by the above as well as being a function of massive money printing. As we move in 4Q20 and into 2021 we continue expect a shift to value oriented companies tied to the reopening of the economy vs those who have benefitted from its closure. The companies who benefitted from closure may not benefit by its opening (and vice versa) and it seems this disconnect is pervasive among investor sentiment. We remind clients that the companies in our model portfolios on average have 1/3rd or greater the valuations vs the overall market. We remain concerned about valuations in the growth sector and election noise, but remain focused on the fact that vaccine availability is months away which will signal a shift in investor sentiment regardless of election results.
The chart below shows relative total returns of value vs growth since 2018 thru 9/20
Our model portfolio performance has been updated on our website as of 9/04/20.
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