Let’s Get Started
Let’s Get Started

Redirect Notice - Black Diamond Portal

You are now leaving AMG Wealth Advisor's website and will be entering the SS&C Advent Black Diamond Wealth Platform ("Black Diamond") website.
Continue Cancel

Redirect Notice - Goal Plan Portal

You are now leaving AMG Wealth Advisors' website and will be entering the MoneyGuidePro® Client Portal (“Goal Plan”) website.
Continue Cancel

Redirect Notice - Schwab Alliance

You are now leaving AMG Wealth Advisors' website and will be entering the Charles Schwab & Co., Inc. (“Schwab”) website.
Continue Cancel
Q3 2020 Market Recap

Oct 09, 2020

Q3 2020 Market Recap

author avatar

Lori Gann Morris, CIMA®, AIF®, CeFT®, Co-Founder / Managing Partner

Global markets rallied in Q3, as both domestic and international equities posted sizeable returns. It was an up and down quarter as July and August brought strong gains of 5.6% and 7.2%, respectively. In fact, there were only four daily declines during the entire month of August. Things turned around in September when the positive trend reversed course and pushed markets briefly into correction territory. With Congress failing to reach an agreement on a stimulus deal and increased election volatility, the month “felt” worse than it actually was. At market close on September 30th, the S&P had only shed 3.8%.

Screenshot (84)-1

So what happened in September?

COVID-19 cases are on the rise in the United States and in Europe. Current valuation multiples indicate that investors, by in large, are optimistic towards the prospects of a re-opening economy and are not pricing in a “third wave” of COVID. However, the possibility of a mild resurgence in cases did put pressure on equities and will likely continue to do so for the foreseeable future.

The death of Justice Ruth Bader Ginsburg created delays in addressing a new stimulus deal by diverting attention to the discussion of Justice nominations and the upcoming Presidental election. These hot-button issues held headlines until a continuing resolution was agreed upon to fund the Government through Mid-December.

At this point, the earliest we would expect a new stimulus deal is mid-November. This assumes that the following issues have been resolved: 1) That the Supreme Court Justice confirmation occurs before the election and 2) That both parties accept the election results as legitmate within a few days of November 3rd. If either of these issues stagnate, it is highly likely that any stimulus deal would be significantly delayed, possibly well into 2021.

Finally, recent economic data is suggesting a “plateauing” of the ongoing economic recovery in lieu of a stimulus deal, and while the rebound off April/May lows is statistically impressive, it’s important to remember that the economy remains well behind pre-COVID levels. It is our conclusion that the market continues to assume a “V-shaped” recovery in both economic data and corporate earnings, and that if this recovery does not unfold as currently anticipated, there will be heightened volatility ahead.

Wealth Management Can Be A Challenge. Learn How We Can Help.

Disclosures

Securities offered through Calton & Associates, Inc. Member FINRA/SIPC. Advisory services offered through of Waterloo Capital LP d/b/a AMG Wealth Advisors, an SEC-registered investment advisor. Calton and Waterloo Capital, LP are separate unrelated entities. For more information about Waterloo, or to receive a copy of our disclosure Form ADV, Form CRS and Privacy Policy call 800.266.1723 or visit adviserinfo.sec.gov/Firm/133705.

Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities or to advise on the use or suitability of The AMG Managed Portfolio Series, or any of the underlying securities in isolation. Information specific to the underlying securities making up the portfolios can be found in the Funds’ prospectuses. Please carefully read the prospectus before making an investment decision.

This commentary offers generalized research, not personalized investment advice. It is for informational purposes only and does not constitute a complete description of our investment services or performance. Nothing in this article should be interpreted to state or imply that past results are an indication of future investment returns. All investments involve risk and unless otherwise stated, are not guaranteed. Be sure to consult with an investment & tax professional before implementing any investment strategy.

Investing involves risk. Principal loss is possible. Investing in ETFs is subject to additional risks that do not apply to conventional mutual funds, including the risks that the market price of the shares may trade at a discount to its net asset value(“NAV), an active secondary market may not develop or be maintained, or trading may be halted by the exchange in which they trade, which may impact a fund’s ability to sell its shares. Shares of any ETF are bought and sold at Market Price (not NAV) and are not individually redeemed from the fund. Brokerage commissions will reduce returns. Market returns are based on the midpoint of the bid/ask spread at 4:00pm Eastern Time (when NAV is normally determined for most ETFs), and do not represent the returns you would receive if you traded shares at other times. Diversification is not a guarantee of performance and may not protect against loss of investment principal.