M1 Finance Portfolio: Dividend Aristocrats 2020 - Week 33 (May 29th, 2020 - $527.57)

Week 33 - $527.57

Every sector experienced tremendous gains for the second week in a row, bolstered by the lifting of nationwide lockdowns as pandemic infection rates slow.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
1. Healthcare (+13.06%)
2. Materials (+9.44%)
3. Consumer Staples (+4.24%)
4. Industrials (+0.21%)

Negative Performing Sectors
5. Information Technology (-4.61%)
6. Consumer Discretionary (-4.95%)
7. Utilities (-10.58%)
8. Communication Services (-12.84%)
9. Financials (-14.36%)
10. Energy (-14.91%)
11. Real Estate (-26.24%)

Weekly Report (May 29th, 2020)

Positive Performing Sectors
1. Information Technology (+8.61%)
2. Industrials (+6.66%)
3. Materials (+6.53%)
4. Utilities (+5.69%)
5. Financials (+4.66%)
6. Consumer Discretionary (+3.70%)
7. Real Estate (+3.65%)
8. Consumer Staples (+3.63%)
9. Communication Services (+3.27%)
10. Healthcare (+2.83%)
11. Energy (+1.86%)

Negative Performing Sectors
None

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

Review

With states across the country slowly transitioning into a reopened economy, stock market confidence stood strong for the second week in a row. This has largely been due to progress in treatments and a vaccine for COVID-19 and the aggressive monetary and fiscal policies implements by both the Federal Reserve and the U.S. government. As a result, the focus now for many investors is not when the economy will recover, but how. Much of the ongoing rise in stock prices are due to a favorable outlook on economic recovery as soon as the fall quarter, and that is assuming businesses and consumption resume to levels before the coronavirus lockdown. Yet this euphoria pales to the reality of today.

1 in 5 people remain unemployed, with only half of that number expected to return to work after lockdown restrictions are lifted, and consumer spending has tanked considerably from the lack of income and changes toward a scarcity mindset, preferring to save instead of spend available cash. Small businesses are also struggling with the permanent loss of income during the months of lockdown and the extra precautions taken to protect consumers at the cost of additional expenses and reduced operations. Large corporations are not exempt. Hertz recently filed for bankruptcy Friday last week, sending its stock price tumbling to near zero as it attempts to restructure its debt and survive. These are just one of many casualties suffered during the global pandemic crisis, and it is unlikely a swift and decisive recovery will occur.

As the economy begins to fully reopen, the true toll of the nationwide lockdowns will become evident in the form of consumer engagement, debt repayments, and business expansion. Weakness in either three of these categories could result in a prolonged bear market, barring yet another wave of the coronavirus that forces a second lockdown.

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Last Week's Update (May 22nd, 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 32 (May 22nd, 2020 - $482.40)

Week 32 - $482.40

All sectors rose as a result of progress from COVID-19 vaccine trials and the reopening of economies across the globe.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
1. Healthcare (+7.78%)

Negative Performing Sectors
2. Materials (-2.11%)
3. Consumer Staples (-2.28%)
4. Industrials (-10.54%)
5. Consumer Discretionary (-11.23%)
6. Energy (-18.40%)
7. Communication Services (-19.04%)
8. Information Technology (-20.33%)
9. Utilities (-20.88%)
10. Financials (-22.58%)
11. Real Estate (-32.56%)

Weekly Report (May 22nd, 2020)

Positive Performing Sectors
1. Financials (+6.67%)
2. Consumer Discretionary (+6.59%)
3. Industrials (+6.28%)
4. Real Estate (+5.85%)
5. Communication Services (+5.53%)
6. Materials (+5.35%)
7. Energy (+4.33%)
8. Utilities (+2.17%)
9. Healthcare (+0.46%)
10. Consumer Staples (+0.44%)
11. Information Technology (+0.14%)

Negative Performing Sectors
None

GICS Sector Performance Ratio - Balanced: From 1:10 (9.09%) to 11:0 (100.00%)

Review

Another week of tumultuous stock rallies after a stock tumble last week marks yet another volatile cycle in the ongoing global economic crisis resulting from a widespread lethal pandemic that has destroyed many lives and many more livelihoods. While there is cause for optimism on the basis that the vaccine's development is on track based on initial results, the vaccine itself will most likely not be ready for public inoculation until mid-2021 at the earliest. Many more testing and research is needed to ensure the vaccine's effectiveness, and any delays in the vaccine's development due to new discoveries or setbacks will vastly affect the economy for the foreseeable future. The stock market has a long way to go before a sure recovery is to be seen, and although the stock market is not the economy itself, the stock market reflects the economy eventually. Predictions and speculation goes only so far, and eventually the real intrinsic value of a company's stock will have to be considered when all other metrics are exhausted. Until there is an absolute certainty that the state of the economic is better, then the ongoing bull market will continue into the future.

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Last Week's Update (May 15th, 2020)
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M1 Finance Dividend Aristocrats 2020 Pie: https://m1.finance/quB1JH2k6

M1 Finance Portfolio: Dividend Aristocrats 2020 - Week 31 (May 15th, 2020 - $434.58)

Week 31 - $434.58

Confidence in the stock market tumbled as recent economic reports point to an increasingly deflationary environment despite unprecedented monetary policies by the Federal Reserve to keep liquidity flowing.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
1. Healthcare (+7.10%)

Negative Performing Sectors
2. Consumer Staples (-3.05%)
3. Materials (-11.00%)
4. Industrials (-19.44%)
5. Information Technology (-21.23%)
6. Consumer Discretionary (-21.37%)
7. Utilities (-25.18%)
8. Energy (-25.31%)
9. Communication Services (-28.59%)
10. Financials (-33.35%)
11. Real Estate (-41.98%)

Weekly Report (May 15th, 2020)

Positive Performing Sectors
1. Healthcare (+0.15%)

Negative Performing Sectors
2. Consumer Staples (-1.04%)
3. Utilities (-2.58%)
4. Materials (-2.70%)
5. Industrials (-4.39%)
6. Consumer Discretionary (-4.91%)
7. Communication Services (-4.92%)
8. Financials (-5.50%)
9. Energy (-6.01%)
10. Information Technology (-7.29%)
11. Real Estate (-7.82%)

GICS Sector Performance Ratio - Balanced: From 9:2 (81.82%) to 1:10 (9.09%)

Review

Since the beginning of the global pandemic crisis, stocks valuations have been in limbo for the last few months as investors attempt to gauge the future performance of companies and price these stocks accordingly. However, with the highly volatile and unpredictable nature of the COVID-19 virus and the worsening economic situation, the stock markets continue to pivot erratically on the basis of a quick recovery versus a prolonged contraction. Recently, it has been forecast that the economic recovery will most likely be slow and painful despite the unlimited exercise of monetary power by the Federal Reserve and the federal government's unprecedented fiscal policies in the form of record-breaking stimulus bills. Even more extraordinarily, core inflation has gone down. This is not surprising considering that both demand and supply have gone down dramatically since the economic shutdowns began. All the money currently injected into the system are not going into tangible products but passive services that provide little to no real intrinsic value: assets that provide returns merely for it existing. The flow of cash is not going into the production of goods and products that would otherwise satiate demand and it is certainly not flowing enough towards the people that would make up that demand. The economic system has effectively clogged itself of illiquid cash that will not move far without substantial increase in both demand and supply on a common level. The second stimulus bill currently under debate in Congress is meant to address this pitfall present in the first stimulus bill. Yet it is doubtful whether any of the provisions listed will make a significant impact in repairing or slowing the economic and financial damage that the shutdowns have caused.

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Last Week's Update (May 8th, 2020)
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M1 Finance Dividend Aristocrats 2020 Pie: https://m1.finance/quB1JH2k6

M1 Finance Portfolio: Dividend Aristocrats 2020 - Week 30 (May 8th, 2020 - $428.85)

Week 30 - $428.85

Stock prices continue to rise even as unemployment numbers reach levels not seen since the Great Depression and more businesses teeter on the verge of bankruptcy.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
1. Healthcare (+6.99%)

Negative Performing Sectors
2. Consumer Staples (-1.51%)
3. Materials (-6.78%)
4. Information Technology (-9.16%)
5. Industrials (-13.67%)
6. Consumer Discretionary (-14.07%)
7. Energy (-16.72%)
8. Communication Services (-21.30%)
9. Utilities (-21.66%)
10. Financials (-26.02%)
11. Real Estate (-31.77%)

Weekly Report (May 8th, 2020)

Positive Performing Sectors
1. Energy (+6.88%)
2. Materials (+5.33%)
3. Information Technology (+3.95%)
4. Industrials (+3.80%)
5. Real Estate (+2.94%)
6. Healthcare (+2.69%)
7. Consumer Staples (+2.66%)
8. Consumer Discretionary (+2.10%)
9. Financials (+0.76%)

Negative Performing Sectors
10. Communication Services (-0.23%)
11. Utilities (-3.29%)

GICS Sector Performance Ratio - Balanced: From 8:3 (72.73%) to 9:2 (81.82%)

Review

Across the board, stocks saw staggeringly high gains this week. Despite a record unemployment number that has practically wiped out all jobs added since the Great Recession, there is a growing expectation of economic recovery as more states begin to phase in economic reopening plans and more progress for testing, treatments, and development for a vaccine against COVID-19 take shape. While the recent highs in the past few weeks has garnered significant progress in recouping the stock price losses suffered from its peak back in late February, the stock market is still only halfway back from its original levels. Coupled with extended quarantines for some areas and indeed for some business sectors, and it is unlikely that the economy will fully recover rapidly and instead become protracted over the next few quarters if not years down the line. Thus, it is reasonable to assume that the market will remain bearish and continue to experience further drops as future reports reveal the state of economic damage the crisis has caused and the progress made to recover from it.

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Last Week's Update (May 1st, 2020)
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M1 Finance Dividend Aristocrats 2020 Pie: https://m1.finance/quB1JH2k6

M1 Finance Portfolio: Dividend Aristocrats 2020 - Week 29 (May 1st, 2020 - $392.56)

Week 29 - $392.56

The S&P 500 index reported its best month since 1987 in the midst of a global economic shutdown, with businesses slowly beginning to reopen across various states.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
1. Healthcare (+2.52%)

Negative Performing Sectors
2. Consumer Staples (-5.43%)
3. Materials (-14.89%)
4. Information Technology (-15.87%)
5. Utilities (-16.82%)
6. Consumer Discretionary (-17.67%)
7. Industrials (-19.12%)
8. Communication Services (-21.60%)
9. Energy (-26.74%)
10. Financials (-27.83%)
11. Real Estate (-36.80%)

Weekly Report (May 1st, 2020)

Positive Performing Sectors
1. Real Estate (+5.75%)
2. Consumer Discretionary (+3.41%)
3. Materials (+1.30%)
4. Industrials (+1.29%)
5. Information Technology (+0.85%)
6. Energy (+0.66%)
7. Communication Services (+0.61%)
8. Financials (+0.03%)

Negative Performing Sectors
9. Consumer Staples (-1.84%)
10. Healthcare (-4.24%)
11. Utilities (-5.38%)

GICS Sector Performance Ratio - Balanced: From 1:10 (9.09%) to 8:3 (72.73%)

Review

Stocks rebounded this week as states across the United States have begun to reopen despite no clear signs of the COVID-19 pandemic declining. Promises of new treatment to combat COVID-19 and the diminishing number of new cases has prompted confidence in the market to begin acquiring new stakes in preparation for a post-COVID-19 economy. Yet even as the economy is beginning to open, there are already troubling signs of a prolonged recession. High unemployment, an impending second wave of the pandemic, deteriorating credit and GDP, and supply shortages are wreaking havoc on the economic health of the nation.

In fact, Warren Buffet's Berkshire Hathaway recently sold all of its positions in airline stocks because of the impact that COVID-19 has had on the airline industry's future. Berkshire Hathaway has a history of buying and holding stocks indefinitely once it has determined a well-valued deal for acquiring a stake in its chosen company. For the company to cash out of all its airline holdings implies it had re-evaluated the industry's future potential and concluded it will not recover from the pandemic crisis for many years. Such conclusions are not limited to airlines. Nearly every sector has taken a significant hit as a result of the crisis and a substantial number of businesses are struggling to find enough cash to keep operations active.

Although the stock market may not directly emulate the state of the current economy, nevertheless it will always catch up to it in due time. It may take many months before the real price of stocks are realized, but reality must come by eventually. For the stock market to continue rising against the current economic situation is to invite a price bubble. There may be many more, deeper dips to come before the economic crisis is averted and the stock market returns to its normal gains.

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Last Week's Update (April 24th, 2020)
M1 Finance Platform Referral Link: https://m1.finance/UIl_N9XNA_CO
M1 Finance Dividend Aristocrats 2020 Pie: https://m1.finance/quB1JH2k6