M1 Finance Portfolio: Dividend Aristocrats 2020 - Week 28 (April 24th, 2020 - $375.14)

Week 28 - $375.14

Stock valuations tanked as oil prices fell into negative territory for the first time in its history, stemming from a combination of both historically low demand and historically high production.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
1. Healthcare (+9.74%)

Negative Performing Sectors
2. Consumer Staples (-2.75%)
3. Utilities (-8.35%)
4. Materials (-16.99%)
5. Information Technology (-17.69%)
6. Industrials (-21.31%)
7. Consumer Discretionary (-22.75%)
8. Communication Services (-23.18%)
9. Energy (-28.34%)
10. Financials (-28.56%)
11. Real Estate (-45.42%)

Weekly Report (April 24th, 2020)

Positive Performing Sectors
1. Energy (+0.50%)

Negative Performing Sectors
2. Healthcare (-0.47%)
3. Information Technology (-1.09%)
4. Materials (-1.31%)
5. Industrials (-1.37%)
6. Consumer Discretionary (-1.67%)
7. Consumer Staples (-2.48%)
8. Financials (-3.33%)
9. Communication Services (-4.74%)
10. Utilities (-6.56%)
11. Real Estate (-6.74%)

GICS Sector Performance Ratio - Balanced: From 7:4 (63.63%) to 1:10 (9.09%)

Review

Despite a moderately strong two-week recovery and a late-week rebound following the passage of a new $484 billion relief bill, sector performance dropped considerably as the nationwide lockdown took its toll on the financial health of small businesses and individuals. More COVID-19 cases continue to put pressure on the healthcare system, unemployment continues to rise, and both states and corporation may have to consider bankruptcy as their coffers drain without revenue to replenish them. On top of which, the negative oil prices caused by the oil price war between Saudi Arabia and Russia has decimated the Energy sector. With a historical low demand and an excess of supply, many oil companies are hemorrhaging cash just to store oil they cannot sell fast enough.

Yet some investors still remain optimistic about the rate of recovery for the economy. Although a severe reduction in overall economic activity has brought down earnings for the year's first quarter, there is an outstanding belief that the economy will recover just as fast as it fell once the lockdown is lifted and business resumes across the states. Already there are some states that have begun reopening businesses with some restrictions against federal guidelines.

However it is important to note that the economic losses suffered during the national shutdown cannot be recovered simply by reopening business again. There have been mass layoffs and bankruptcies with unprecedented amounts of loans taken out to support a currently-nonexistent economy with the expectation for those loans to be paid off on time despite the lost time due to lockdowns. This will inevitably have long term effects on the economy and in the stock market. It is still too early to suggest that the market has bottomed out just yet, and with a second outbreak poised to come near the end of the year, there is a likelihood of a second shutdown and possibly further drops in stock prices.

Businesses are desperate for cash, and the investors that come to their assistance by strengthening their positions in current investments shall come to be well rewarded once the crisis is averted and the economy begins to recover. Most fortunes have been made during recessions, as those are the people who have placed their assets to work in a time of great need.

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Last Week's Update (April 17th, 2020)
M1 Finance Platform Referral Link: https://m1.finance/UIl_N9XNA_CO
M1 Finance Dividend Aristocrats 2020 Pie: https://m1.finance/quB1JH2k6

M1 Finance Portfolio: Dividend Aristocrats 2020 - Week 27 (April 17th, 2020 - $371.49)

Week 27 - $371.49

The stock market rose again for the second straight week from positive news of the COVID-19 pandemic showing signs of slowing down and plans for a three-phased economic reopening is introduced.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
1. Healthcare (+10.74%)
2. Utilities (+2.33%)
3. Consumer Staples (+1.13%)

Negative Performing Sectors
4. Materials (-15.52%)
5. Communication Services (-16.46%)
6. Information Technology (-16.49%)
7. Industrials (-19.89%)
8. Consumer Discretionary (-20.96%)
9. Financials (-24.75%)
10. Energy (-29.87%)
11. Real Estate (-37.91%)

Weekly Report (April 17th, 2020)

Positive Performing Sectors
1. Healthcare (+5.85%)
2. Consumer Staples (+3.69%)
3. Utilities (+2.97%)
4. Energy (+2.55%)
5. Consumer Discretionary (+1.92%)
6. Communication Services (+1.64%)

Negative Performing Sectors
7. Industrials (-0.91%)
8. Information Technology (-0.98%)
9. Materials (-2.18%)
10. Financials (-2.26%)
11. Real Estate (-6.40%)

GICS Sector Performance Ratio - Balanced: From 11:0 (100.00%) to 7:4 (63.63%)

Review

Rising optimism over receding new cases of COVID-19 boosted the stock markets higher this week despite weak economic data indicating an impending recession looming in the next few months. Progress over new testing capabilities and developments over experimental treatments and a new vaccine is steady, but will likely not make any significant impact in the near future. Active social distancing measures are currently still the most effective combatant against the pandemic outbreak and thus shutdowns will continue to be extended until there is enough confidence to resume economic activity.

Every precaution is taken to ensure that a second wave of COVID-19 outbreaks will not occur, for if it does, the economic fallout will worsen and the recovery will become long and painful. Both monetary and fiscal measures to keep businesses afloat and individuals out of financial distress continue to ramp up, yet the impact is not potent enough to stop the skyrocketing unemployment rates and the public discontent over growing amounts of debt and the inability to obtain new credit or income to cease the hemorrhaging of people's wealth. The slow and steady response in a rapidly-deteriorating crisis could result in irreparable damage to key components of the US economy that may take many years to fully recover from.

It is wise to be cautious in such case, as the current optimism in the stock market is not truly reflective of the economic status of the country as a whole. In the short term, stock markets are volatile and have little, if any, ties to the actual economic performance of a nation, but in the long term, it serves as one of the many accurate indicators to the strength and prosperity of the nation. For now, the trend of the economy remains negative, so expect to see further dips in the future until the pandemic is fully contained and consumer confidence and business activity returns.

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Last Week's Update (April 10th, 2020)
M1 Finance Platform Referral Link: https://m1.finance/UIl_N9XNA_CO
M1 Finance Dividend Aristocrats 2020 Pie: https://m1.finance/quB1JH2k6

M1 Finance Portfolio: Dividend Aristocrats 2020 - Week 26 (April 10th, 2020 - $357.05)

Week 26 - $357.05

The stock market rallied for the entire week as news of new COVID-19 cases begin to decline and the first wave of stimulus checks begin to arrive.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
1. Healthcare (+1.37%)

Negative Performing Sectors
2. Utilities (-2.24%)
3. Consumer Staples (-4.65%)
4. Materials (-12.71%)
5. Information Technology (-15.51%)
6. Industrials (-19.16%)
7. Communication Services (-19.48%)
8. Financials (-22.29%)
9. Consumer Discretionary (-24.35%)
10. Real Estate (-30.41%)
11. Energy (-34.01%)

Weekly Report (April 10th, 2020)

Positive Performing Sectors
1. Real Estate (+27.28%)
2. Consumer Discretionary (+15.93%)
3. Materials (+15.50%)
4. Financials (+14.19%)
5. Utilities (+10.24%)
6. Industrials (+9.78%)
7. Communication Services (+8.71%)
8. Energy (+8.61%)
9. Healthcare (+8.54%)
10. Information Technology (+8.01%)
11. Consumer Staples (+6.53%)

Negative Performing Sectors
None

GICS Sector Performance Ratio - Balanced: From 3:8 (27.27%) to 11:0 (100.00%)

Review

Stocks experienced major gains across a shortened trading week, with investors exuberant over COVID-19 cases appearing to level out and talks of reopening the US economy start to materialize. This would mark the second week during the bear market in which every sector has performed positively despite worsening economic indicators such as the increased unemployment numbers and reduced quarterly earnings.

Heightened sentiments are likely due to not only the lessened impact of the COVID-19 pandemic in the United States, but also to the fiscal and monetary policies of the US government and the Federal Reserve in issuing virtually limitless cash and credit to support businesses struggling during the nationwide shutdowns. This has also contributed to the idea that the US government will go to any lengths to bail out major corporations at any cost to keep an economic ripple effect from occurring, even if the company's quality had deteriorated long before the pandemic crisis had come to fruition. The government has made it clear that both protecting the life and safety of the people as well as the economic stability of the nation are a first priority. It is willing to exceed its normal 2% inflation per year to do so.

Yet it is forgotten that an economy does not truly revolve around money, but the resources it contains. Although demand will skyrocket once economic activity resumes, the lost time in production and lessened supplies could result in a protracted bear market, especially if the millions of unemployed are unable to find work soon.

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Last Week's Update (April 3rd, 2020)
M1 Finance Platform Referral Link: https://m1.finance/UIl_N9XNA_CO
M1 Finance Dividend Aristocrats 2020 Pie: https://m1.finance/quB1JH2k6

M1 Finance Portfolio: Dividend Aristocrats 2020 - Week 25 (April 3rd, 2020 - $288.64)

Week 25 - $288.64

After last week's positive performance, stocks slightly dropped following poor economic reports as the global economic shutdown heads into its third month.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
None

Negative Performing Sectors
1. Healthcare (-11.41%)
2. Consumer Staples (-13.32%)
3. Utilities (-17.74%)
4. Information Technology (-29.01%)
5. Materials (-35.17%)
6. Communication Services (-36.27%)
7. Industrials (-40.84%)
8. Financials (-42.41%)
9. Energy (-46.48%)
10. Consumer Discretionary (-47.13%)
11. Real Estate (-62.02%)

Weekly Report (April 3rd, 2020)

Positive Performing Sectors
1. Energy (+7.72%)
2. Healthcare (+3.93%)
3. Consumer Staples (+2.06%)

Negative Performing Sectors
4. Utilities (-0.71%)
5. Information Technology (-2.28%)
6. Materials (-3.03%)
7. Financials (-7.35%)
8. Communication Services (-8.14%)
9. Industrials (-8.16%)
10. Consumer Discretionary (-9.01%)
11. Real Estate (-15.77%)

GICS Sector Performance Ratio - Balanced: From 11:0 (100.00%) to 3:8 (27.27%)

Update

United Technologies Corporation (UTX) and Raytheon Company (RTN) had closed a merger on April 3rd. The new company formed will be called Raytheon Technologies Corporation trading under the ticket symbol RTX, and all existing UTX shares in the Industrials sector will be converted to RTX shares.

Review

Stocks dipped back into the negatives this week as the quarterly economic reports showed the expected contractions experienced by the coronavirus-related shutdowns. Unemployment claims broke new records with over a staggering 6 million Americans filing from last week. Oil talks between Saudi Arabia and Russia faced delays and the US Government may be considering a bailout of the Energy Sector soon to prevent a major collapse.

Although this week faced less volatility than the previous weeks, the stock market will face greater losses in the next few weeks as shutdowns are extended and COVID-19 cases continue to climb. Businesses across all sectors are hemorrhaging liquid cash to keep operations alive with greatly-reduced income. The economy could be heading for a disastrous recession should further bailouts be necessary. Raising inflation is meant to serve as a short-term stopgap to economic shortages, not a long-term solution. Work must be done to produce goods and services and provide the resources necessary to sustain people's living. Without any additional production for a prolonged period of time, companies may see some damaging contractions in their business that may take many years to recover from, if not at all.

Last Week's Update (March 27th, 2020)

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

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