Womack Investment Advisers

WIA MARKET UPDATE February 25, 2020 The corona-virus appears to have inspired two distinct schools of thought among investors. Some investors currently favor opportunities that are considered lower risk, like Treasury bonds and gold, because they’re concerned about the potential impact of the coronavirus on the global economy. Others are piling into higher risk assets, like stocks, that could benefit if central banks (like the United States Federal Reserve) take steps to stimulate economic growth, reported Randall Forsyth of Barron’s . During periods of uncertainty, like this one, the benefits of holding well-allocated, well-diversified portfolios become clear: By holding asset classes (e.g., stocks, bonds, and other asset types) that respond differently to the same market conditions, investors protect themselves from the poor performance of a single type of asset. By diversifying holdings within asset classes (e.g., investing in different parts of the wor...

  Many stock markets around the world moved higher last week. Investors’ optimism in the face of economic headwinds has confounded some in the financial services industry. Laurence Fletcher and Jennifer Ablan of Financial Times cited several money managers who believe investors have become complacent. One theory is investors’ buy-the-dip mentality has become so firmly ingrained that any price drop is seen as a buying opportunity, regardless of share price valuation. Another theory is investors remain confident in the face of declining economic growth expectations because they expect central bankers to save the day: “Key stock markets are hovering close to record highs even while the death count from the China-centered virus rises and travel in, out, and around the country remains heavily restricted, hurting the outlook for domestic and international companies. Regardless, stumbles in stocks are quickly reversed. To some traders, this is proof that investors bel...

When billionaires Michael Bloomberg and Tom Steyer threw their names in the hat for the Democratic nomination for president of the United States, most probably expected they would spend some of their own money in the pursuit of the nomination.   But few expected how they would bury the race in their own money.   To date, Steyer and Bloomberg have each spent nearly $200 million, each more than double Democratic contender Bernie Sanders, and each more than three times Elizabeth Warren and Joe Biden.   All that money doesn’t seem to have done much for Tom Steyer, but Bloomberg’s omnipresent advertising in critical markets has propelled him higher in the polls steadily.   (Chart from Marketwatch.com)