M1 Finance Portfolio: Dividend Aristocrats 2020 - Week 20 (February 28th, 2020 - $279.57)

Week 20 - $279.57

The week experienced consistent major selloffs through each day as fears over COVID-19's impact over the global economy strengthened following growing reports of coronavirus cases internationally.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
None

Negative Performing Sectors
1. Healthcare (-3.12%)
2. Communication Services (-9.22%)
3. Consumer Staples (-9.37%)
4. Industrials (-9.85%)
5. Information Technology (-10.12%)
6. Materials (-14.24%)
7. Financials (-14.90%)
8. Consumer Discretionary (-15.78%)
9. Real Estate (-15.97%)
10. Utilities (-16.29%)
11. Energy (-30.02%)

Weekly Report (February 28th, 2020)

Positive Performing Sectors
None

Negative Performing Sectors
1. Communication Services (-8.54%)
2. Consumer Staples (-9.97%)
3. Real Estate (-9.98%)
4. Industrials (-10.08%)
5. Healthcare (-10.28%)
6. Consumer Discretionary (-11.72%)
7. Materials (-12.27%)
8. Utilities (-12.54%)
9. Energy (-13.16%)
10. Information Technology (-13.18%)
11. Financials (-13.33%)

GICS Sector Performance Ratio - Balanced: From 3:8 (27.27%) to 0:11 (0.00%)

Review

The stock market quickly fell into a correction for the week, with selloffs occurring across all sectors. Unrealized gains since the start of the portfolio have been reversed and all sectors are experiencing negative performance. The coronavirus COVID-19 has had a substantial impact on the worldwide market unlike that seen with most epidemics of the 21st century. Many have been contained within their country of origin, but with this particular epidemic, the exponential scale in which the virus has spread has forced many countries to reconsider their international trade connections. Businesses across the world has slowed thanks in part to the notable over-reliance on the Chinese economy to produce basic products and materials and government efforts to contain the spread of the epidemic by enforcing strict no-contact measures.

COVID-19 may reach pandemic scale, but like many widespread outbreaks in the past, it will eventually fizzle out as more patients become better and vaccines are developed. It is often forgotten that there are still diseases lingering and still infecting people from past epidemics in the 21st century itself, yet because there are now treatments and preventative care available for those diseases, that is why people feel more secure. The stock market will be negatively performing for some time, perhaps for weeks or even months. However this drop in the market is mainly due to investor sentiment. Yes, business has been affected by the affliction, and it is expected that the next quarter will report negative losses. However, the businesses themselves would have to be in serious financial trouble already for a single bad year to put them out of business. Blue-chip companies especially are very resilient against dramatic dips. They have enough cushion to last them through a good portion of bad income times.

Thereby, this correction is a healthy readjustment of the market, with investors looking more closely at the inherent value of the asset and analyzing it with practical, reasonable, and logical conclusions. Many stocks have been bloated with equity value for some time without reasonable cause, and this correction will help bring the valuations down to a value more grounded in reality than speculation.

Last Week's Update (February 21st, 2020)

M1 Finance Platform Referral Link: https://m1.finance/UIl_N9XNA_CO

M1 Finance Dividend Aristocrats 2020 Pie: https://m1.finance/quB1JH2k6