M1 Finance Portfolio: Dividend Aristocrats 2020 - Week 37 (June 26th, 2020 - $605.47)

Week 37 - $605.47

A resurgence in coronavirus cases across multiple states has sent stocks tumbling with fears that the reopening of the economy will slow or even reverse course in the weeks to come.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
1. Materials (+1.17%)
2. Healthcare (+0.30%)

Negative Performing Sectors
3. Consumer Staples (-0.62%)
4. Information Technology (-4.92%)
5. Industrials (-5.45%)
6. Consumer Discretionary (-8.73%)
7. Financials (-13.29%)
8. Utilities (-20.34%)
9. Communication Services (-22.60%)
10. Real Estate (-22.92%)
11. Energy (-23.66%)

Weekly Report (June 26th, 2020)

Positive Performing Sectors
None

Negative Performing Sectors
1. Utilities (-1.26%)
2. Information Technology (-2.87%)
3. Consumer Staples (-2.93%)
4. Healthcare (-3.21%)
5. Materials (-3.31%)
6. Industrials (-3.57%)
7. Real Estate (-3.73%)
8. Communication Services (-4.05%)
9. Energy (-4.83%)
10. Financials (-5.19%)
11. Consumer Discretionary (-5.58%)

GICS Sector Performance Ratio - Balanced: From 7:4 (63.64%) to 0:11 (0.00%)

Review

With a surge of coronavirus cases threatening to fill medical facilities to full capacity once more, states have begun to re-implement preventative measures to slow the spread of the pandemic. Over the course of this week, COVID-19 cases saw record spikes in several states where infected cases have stayed relatively low since first infection, with the death toll projections now nearing 200k. This has caused concern among many investors that future earnings will experience a prolonged reduction before any tangible recovery, particularly as stock valuations begin to slump from the bear market rally of the last few weeks.

This has been in line with the expectation that stock valuations will ultimately fall in line with the economic reality presented through the hard data provided by the market, regardless of the ongoing trends in investment. Short term stock market trends rarely, if ever, match that of the true intrinsic value of the economy. However, accumulating over long periods of time, the stock market will eventually mimic, if not match, this intrinsic value.

The current concern then is not for the stock valuations, as their fall is a given when regarding the current outlook on economic activity, but on the sustained revenue, and dividends, of the companies in operation. Should the economy continue to suffer prolonged drawbacks from the pandemic, expect to see further cuts and suspensions of dividends to curb the monetary drain by unsustainable debt if the crisis is not rectified soon.

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Last Week's Update (June 19th, 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 36 (June 19th, 2020 - $607.12)

Week 36 - $607.12

After a chaotic week following worrisome developments in increasing coronavirus cases across the country, stocks began to recover on new economic data suggesting the economy is recovering from its lowest levels.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
1. Materials (+8.16%)
2. Healthcare (+7.33%)
3. Consumer Staples (+5.34%)
4. Consumer Discretionary (+2.37%)
5. Industrials (+1.27%)
6. Information Technology (+0.83%)

Negative Performing Sectors
7. Financials (-3.71%)
8. Communication Services (-15.52%)
9. Energy (-15.65%)
10. Real Estate (-17.01%)
11. Utilities (-18.60%)

Weekly Report (June 19th, 2020)

Positive Performing Sectors
1. Consumer Staples (+2.68%)
2. Materials (+2.48%)
3. Consumer Discretionary (+2.38%)
4. Healthcare (+2.18%)
5. Financials (+2.04%)
6. Industrials (+1.31%)
7. Information Technology (+1.29%)

Negative Performing Sectors
8. Communication Services (-0.64%)
9. Energy (-2.42%)
10. Utilities (-3.16%)
11. Real Estate (-3.32%)

GICS Sector Performance Ratio - Balanced: From 0:11 (0.00%) to 7:4 (63.64%)

Review

Stocks fell in limbo at the beginning of the week, see-sawing between gains and losses as a new surge in coronavirus cases sowed doubt into the future prospective of the economy. However, with recent economic data showing signs of increasing consumer activity, backed by the Federal Reserve's backing of individual corporate bonds and plans of a potential one trillion dollar infrastructure project from the White House, the markets rallied by the end of the week.
While it is welcoming to see the economy recovering from its lows back in March, one must be wary of overoptimistic projections. This is especially as state governments across the country are refusing to close back down despite a surge in new coronavirus cases that may overwhelm medical facilities faster than the initial wave introduced from February. Medical supplies are often at dangerously low levels and with every business now relying on these medical supplies themselves to stay in operation, a greater outbreak will strain the system far beyond what the economy itself could hope to recover from in a short period of time.

Trillions of dollars have been pumped into the economy far faster than it has ever been in the past ten years. Even with such aggressive financial support, without a fully recovered economy the money pumped into the system will do little to prevent an economic collapse once the situation deteriorates long enough and debt becomes unrecoverable. It is safer to err on the side of caution and wait for new developments on coronavirus treatments and, more importantly, the vaccine, over any recent updates on the state of the national economy.

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Last Week's Update (June 12th, 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 35 (June 12th, 2020 - $581.52)

Week 35 - $581.52

Stocks continued their upward climb for most of the week until a major selloff on Thursday wiped out much of the gains made in the past few weeks.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
1. Materials (+3.35%)
2. Healthcare (+2.79%)
3. Consumer Staples (+0.25%)

Negative Performing Sectors
4. Industrials (-1.26%)
5. Information Technology (-1.77%)
6. Consumer Discretionary (-2.20%)
7. Financials (-7.68%)
8. Real Estate (-11.49%)
9. Energy (-11.67%)
10. Utilities (-13.05%)
11. Communication Services (-14.77%)

Weekly Report (June 12th, 2020)

Positive Performing Sectors
None

Negative Performing Sectors
1. Utilities (-1.91%)
2. Consumer Staples (-3.74%)
3. Healthcare (-4.30%)
4. Real Estate (-5.44%)
5. Communication Services (-6.85%)
6. Consumer Discretionary (-6.90%)
7. Information Technology (-6.98%)
8. Financials (-7.73%)
9. Industrials (-8.12%)
10. Materials (-8.47%)
11. Energy (-9.65%)

GICS Sector Performance Ratio - Balanced: From 11:0 (100.00%) to 0:11 (0.00%)

Review

After a three-week long streak, stocks finally tumbled in one of the deepest selloffs since the bear market began in late February. Sparked by concerning news from the Federal Reserve on a prolonged recession, even with aggressive monetary and fiscal policy and the slow reopening of U.S. businesses, many sectors' stock values plummeted down to nearly double digits this week. This kind of selloff was expected at some point, as the economy has yet to recover but stock prices assumed levels similar to that of the pre-COVID-19 crisis before any major shutdowns occurred.

Despite all this, the Dividend Aristocrats continue to stand strong even against insurmountable financial odds. Many still continue to maintain their dividends throughout the crisis, and although some have opted to suspend their dividends as in the case of Lowe's (LOW) a few weeks ago, it is likely that many will continue to operate as usual particularly with the ease of cash flow in the system. As the portfolio continues to expand its stock positions among the various companies, dividends will continue to flow through at faster rates than the current stock valuations for the moment.

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Last Week's Update (June 5th, 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 34 (June 5th, 2020 - $597.59)

Week 34 - $597.59

For the third straight week, all sectors rose following a surprising development of 2.5 million jobs added in May last month and a declining unemployment rate of 13.3% since April's highest level, signaling hope of a potentially swift economic recovery.

Total Report (Since October 11th, 2019)

Positive Performing Sectors
1. Materials (+22.51%)
2. Industrials (+16.50%)
3. Information Technology (+13.63%)
4. Healthcare (+13.05%)
5. Consumer Discretionary (+12.42%)
6. Energy (+8.83%)
7. Consumer Staples (+8.03%)
8. Financials (+8.00%)

Negative Performing Sectors
9. Communication Services (-1.08%)
10. Real Estate (-1.45%)
11. Utilities (-8.37%)

Weekly Report (June 5th, 2020)

Positive Performing Sectors
1. Real Estate (+15.14%)
2. Energy (+13.32%)
3. Financials (+12.69%)
4. Consumer Discretionary (+9.39%)
5. Information Technology (+9.31%)
6. Industrials (+8.87%)
7. Materials (+6.95%)
8. Communication Services (+6.13%)
9. Consumer Staples (+2.00%)
10. Utilities (+1.01%)
11. Healthcare (+0.16%)

Negative Performing Sectors
None

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

Review

For three straight weeks, the entire stock market has rose from the major declines of the past three months to nearly recovering all of its gains since before the February price crash. Although there are still some ways to go before the economy has fully regained its strength, investors have already begun to price in stock values in a post-pandemic economy. All sectors have experienced positive gains in stock price without fail, with the hardest hit segments such as Energy and Real Estate driving much of the recent gains as a result of their severe undervaluation during the coronavirus crisis. This sudden and consistent rise in stock prices have been prompted by the positive jobs report and declining unemployment rate that may indicate a faster-than-expected recovery with more states opening up more businesses.

However it is wise to be cautious about these all-round gains, as much of the enthusiasm as of late has been on the basis that the economy will be back to levels before the shutdowns occurred. Already there is an ongoing trend of stock prices reaching higher than those levels, which may cause concerns of speculations in the market, especially as previous speculations of a failing economy this month proved unsubstantial. The economy itself has yet to show significant and substantial signs of recovery, as the recent reports are only reflective of last month and not the future performance of the economy for the year ahead. Further details are necessary to better evaluate the state of the economy moving forward and until then, it is likely stock prices will become unsustainable if businesses fail to recuperate earnings from lost time.

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Last Week's Update (May 29th, 2020)
M1 Finance Platform Referral Link: https://m1.finance/UIl_N9XNA_CO
M1 Finance Dividend Aristocrats 2020 Pie: https://m1.finance/quB1JH2k6