Discover more from Conscious Capital Advisors Research
📑 Research Notes for 2020-09-18
This week, we look at the cyclical stock rotation, U.S. equity flows, election volatility, and the shortcomings of central bank policy.
We are a California-based registered investment advisor and investment thought leader, updating you on this week’s top investment observations and market performance.
Do not reply to this email with any service requests, contact us instead for support with your accounts if needed.
Here’s why September can be a stock rotation month.
Stock and sector rotations can occur in both up and down markets, and are most often associated with volatility than direction.
U.S. fund flows batter equity funds in August.
The hardest-hit equity style-box category was large blend. Those funds posted a record $32 billion of outflows, topping the previous record of $24 billion set in April 2020. It was also the category’s fifth consecutive month of outflows–the longest such streak in data going back to 1993. More than 70% of its August outflows came from passively managed funds.
Election volatility is here and more intense than ever.
October is a historically volatile month, and the VIX tends to peak in the month, where we even get the so called October effect or Mark Twain effect. And this October is a particularly interesting month of market fear because not only is it election year – it’s an election involving one of our most volatile U.S. President’s of all time – a certain Trump.
The recession is testing the limits and shortfalls of the Federal Reserve’s toolkit.
The central bank was quick to bring interest rates to zero, backstop credit markets and buy up corporate debt — but those policies often sidestep Americans who don’t hold investments. A lending program for small and mid-sized businesses has seen little uptake, raising doubts about the Fed’s ability to directly help companies fighting for survival. And as the pandemic widens long-standing racial and economic gaps, the Fed is facing urgent questions over how it can steer a recovery that lifts all Americans.
Curated by Joseph Lu, CFA®
Joseph has over a decade of experience as an investment professional, primarily in quantitative analysis and portfolio management roles. He is the founder and managing director of Conscious Capital Advisors and a CFA® Charterholder. The CFA charter is a globally respected, graduate-level investment credential by the CFA Institute, a global association of more than 90,000 investment professionals working in over 133 countries.
Have a question about what we shared? Email us at email@example.com.
Do not reply to this email with any service requests, contact us for support if needed.
The information presented in this newsletter is for educational purposes only and is not a solicitation for any specific security, product, service, or investment strategy.
Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to consult with a qualified financial advisor, tax professional, or attorney before implementing any strategy or recommendation you may read here.