The Simple Approach to Survive a Downturn
Sometimes, simplicity is the best approach.
Make sure your portfolio is diversified among asset classes and regions, re-balance regularly, and maintain a high savings rate with low leverage.
Don’t panic and sell stocks after a stock market crash, don’t get over-leveraged in mortgages or margin during bull markets, and occasionally take a step back and examine the big picture to make sure you’re on the right track.
Whit that said, we did have a gift of a fast rebound. Will it last? That is a million dollar question. This is a good time to take some money off the table, so to speak. Reduce trade size. Really look for value.
Asset Class Diversification
Diversifying a portfolio into several asset classes and re-balancing annually or more regularly historically gives investors strong investment returns over time.
Education
The Options Edge Team is wrapping up some great learning videos. Mike Khouw and the other analysts will present timeless advice on options, trading, and idea structuring.
Is there a topic that you need answers to. Let us know.
- Take a 30 second video of you asking the questions and send it in. You might see yourself on the site.
- Send us an email with your topic.
Happy Monday. Good Luck out there this week.
Global Spotlight
A Unique Ramadan Begins. The Islamic holy month of Ramadan will begin worldwide around April 23. Because the month typically involves daily social gatherings and communal prayer in mosques, it will present yet more security and economic challenges to local and national governments in Muslim-majority countries already struggling to deal with the COVID-19 pandemic.
Israel tests its reopening. Israel’s government may start to lift restrictions as early as next week on its nationwide lockdown as it seeks to temper the mass unemployment and social pushback for its widespread measures to stop the spread of COVID-19.
India Assesses its Lockdown. Although Prime Minister Narendra Modi has extended India’s nationwide lockdown through May 3, Indian officials are in the process of reviewing the lockdown and have announced the end of some restrictions beginning April 20, including manufacturing bases operating in special economic zones so long as workers stay on the premises or close by and have controlled access.
Virtual Brexit Talks. The European Union and the United Kingdom will hold the second round of free trade agreement negotiations next week, after several weeks of inactivity because of the COVID-19 crisis.
Bank Indonesia Flirts with Debt Monetization. Bank Indonesia and the Indonesian Finance Ministry will likely reach an agreement next week allowing the central bank to directly buy rupiah-denominated government bonds directly from the government.
Stratfor.com
Earnings
Source I/B/E/S data from Refinitiv
Aggregate Estimates and Revisions
- 20Q1 earnings are expected to decrease 13.0% from 19Q1. Excluding the energy sector, the earnings growth estimate is -11.4%.
- Of the 47 companies in the S&P 500 that have reported earnings to date for 20Q1, 68.1% have reported earnings above analyst expectations. This compares to a long-term average of 65% and prior four quarter average of 74%.
- 20Q1 revenue is expected to increase 0.3% from 19Q1. Excluding the energy sector, the growth estimate is 1.5%.
- During the week of Apr. 20, 91 S&P 500 companies are expected to report quarterly earnings. See the full list here.
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