Atlas Outlook (Newsletter) – September 2021

by | Sep 2, 2021

September 2021

Money Management Newsletter & More

Atlas Market Report

Market Commentary (Key items you need to know):
  • Market Outlook by Ronald E. Lang
  • Fun Links (Must See! Some Good Ones You Will Enjoy)
(we love your Feedback – email mail us back with your thoughts)

Key items you need to know –

Better understanding how the stock markets work will make you a better investor, but more importantly, should help you be less emotional about the swings in the market. For example, The S&P 500 Index is made up of 500 stocks, but the Top 5 have a market cap greater than the bottom 250 stocks in the index. Does that make sense? Of course not. We like to follow two other indexes that are more representative of the market. The first is OEF. This is the S&P 100 Equal Weighted Index. Of course it isn’t exactly 1% for each of the top 100 because of daily fluctuations, but it better represents the top 100 market cap weighted stocks. We also like RSP. This is the S&P 500 Equal Weighted Index. Similar to the S&P 100, but tries to equal weight all 500 stocks. Now most investors will use SPX (ticker for S&P 500) or SPY (ETF for the S&P 500) as the barometer for market performance. Remember SPX and SPY are heavily weighted to the Top 5 stocks (AAPL, MSFT, FB, AMZN, GOOG). Over the last 5 months, those five(5) stocks have gone sideways, up, but sideways relative to the overall stock market. RSP, the S&P 500 Equal Weighted has Outperformed the SPY and OEF for over a year (see chart below).

What does all this Technical speak mean?

This means the “broader” market has been doing much better than the top 5 stocks in the last 12 months. Even more so since the March 23rd, 2021 COVID bottom. If your portfolio is focused and allocated across industries and sectors to reduce volatility, you actually did better than someone that was concentrated in a few specific areas. We have been preaching forever as its seems (I’m sure the avid readers know this), you can’t always compare your portfolio and portfolio performance to the SPY (Or the S&P 500 Index). Every investor is different with their investment objectives.
For example, the hottest sectors over the last year; Cannabis, Electric Vehicle, Pharmaceutical, BioTech and Real Estate have been quite volatile during this time. Does this mean that there is no more momentum in these sectors or time to get out…..it depends on your objectives. Typically when you are a long-term investor, you should have a 3-5 year horizon line. Unless something drastic happens to that sector or overall market, review quarterly reports and see if they are still “in-line” with their Revenues and EPS along with guidance in their projections. If so, just because the overall market is stagnant, your long-term thesis on investments should remain the same. Don’t trade your portfolio, invest and stay smart. You will end up with greater long-term performance. Sage advice in uncertain times.

S&P 500 Index Chart

Comparison with:
OEF (S&P 100 Equal Weighted)
RSP (S&P 500 Equal Weighted)
Click Chart to make Larger

THE BILL WILL COME DUE…….SOMEDAY

We have saying this since 2018 when the new tax laws came into effect along with several stimulus packages pumping what seems endless cash into our economy that the Bill Will Come Due Someday. When it does, it will have a significant and long-lasting impact on our economy. We can’t tax our way out of it and not sure this was a well thought out strategy. Below is a good article I read that you may find interesting and provide more data and detail that we ever could.

In Summary

I was in the supermarket last week (while it was still August) and saw Halloween items already on display. What happens on November 1st? Christmas items on display, of course! All retail is in a constant catch up race to sell us stuff, whether we need it or not, its the American way! There will be more shortages of things we need, but do you see shortages of things we don’t need? Such as; Potato Chips, Candy, Ice Cream and other vices that we don’t need, but a nice-to-have treat. Just an observation I wanted to share and perhaps garner a smile from you while you notice these things next time you are in the supermarket.
As always, be well, stay safe and healthy!
Authored by
Ronald E. Lang, Principal
Atlas Wealth Management, LLC
Investment Advisors & Estate Planners
401(k) Retirement Specialists
Toll Free 888.403.9400
We take the pain out of Building Wealth and Protecting Assets
(Life Insurance and Fixed-Indexed Annuities)
For Management, Education, Setup and Evaluation of your Company 401(k) or SIMPLE IRA
DISCLOSURE: We like to make this newsletter a “quick read” with small bite-sized chucks of topical information so you can understand what’s going on in the markets and economy and if it may affect you, give you time to make the steps necessary to protect yourself or take advantage of it. This newsletter for purely for Entertainment Purposes Only!