The Federal Reserve, as expected, announced its intention to begin tapering its $120-billion-per-month asset purchase program, by $15 billion per month. The market’s response — with the S&P 500 closing the day at an all-time high — shows that the move was already largely priced and anticipated. Investors will still have adjustments to make, but potential volatility from the start of the taper seems to be in the rear-view mirror.
We are entering the season which, between now and the first few months of the new year, is often marked by speculative fervor and short-covering rallies. The course of the year thus far suggests — on the basis of history — further strength into year-end, although in this season, both reversals and accelerations may occur.
Our comments above, and our comments last week, on companies whose inputs don’t depend on so-called lower-skilled labor, and whose products are not delivered on trucks or container ships, still stand.
Our clients’ portfolios contain both reliable participants in overall economic growth, and investments in companies that are on the forefront of the emerging economic world that has been pulled forward by the pandemic.
As we have often repeated over the post-pandemic period, that means companies that in one way or another are involved in business digitization, fintech innovation, healthcare disruption, cybersecurity, automation, the internet of things, and next-gen networking.
The opportunities in these industries are huge and compelling, and should be invested in, in spite of incessant concerns about financial and monetary turmoil.
Of course, we monitor risks as well, which is why in spite of its lackluster performance in 2021, we believe that gold retains perennial value — and why decentralized cryptocurrencies continue to have perceived utility as hedges against government and central bank policy errors.
We continue to favor some base metals and uranium, bitcoin, some precious metals, stocks in the high-tech sectors mentioned above, and high-quality growth companies in medical, industrial , financial, materials, and other growing sectors of the economy.
Thanks for listening; we welcome your calls and questions.
