July 2024 brought significant developments in the financial markets, marked by notable shifts in both stock and bond performance. In his latest market update video, Doug English, Certified Financial Planner® Practitioner of ACT Advisors offers a comprehensive analysis of these changes and their implications for investors in his latest video below:
In July, the S&P 500 saw a modest increase of about 1%, while the NASDAQ experienced a slight dip. Interestingly, the Dow Jones Industrial Average did quite well, going up by 4%. Even more surprising, small-cap stocks, which have been lagging behind for a while, jumped by 10% in just one month. This broader participation in the market is a positive sign.
The S&P 500, being a cap-weighted index, is predominantly influenced by the largest companies, particularly mega tech firms. Recently, the excitement around AI and its anticipated impact on profits has driven market returns. However, seeing small caps and the Dow do well suggests that other sectors are starting to catch up, making for a healthier, more balanced market.
The bond market also performed well, with an overall increase of about 2% for July. This means you might see returns in your account ranging from 1% to 2% for the month.
At ACT Advisors, we’re always ready to adjust our strategies to keep up with the market. Given the recent developments, we’re making some changes. Our stock rotation system will shift from tech stocks to mid-cap stocks, which might position us well for the ongoing rally. For bonds, we’re moving into one-third convertible bonds, one-third long-term treasuries, and one-third bond index. These adjustments are aimed at making the most of the current market conditions.
As Doug English explains, “The reason you have the stock rotation and the bond rotation is so the system always keeps you up to date. The system is going to sell the tech stocks that are currently in the stock rotation and move into the mid-cap stocks.”
The current period in the presidential election cycle is known for heightened market volatility. Investors should be prepared for fluctuations between now and the election. Historically, markets tend to calm down and even rise after the election. This highlights the importance of having a flexible investment strategy that can adapt to changes.
For investors, the key takeaway is the importance of maintaining a diversified portfolio. The shifts in market performance highlight the need to stay agile and responsive to changing market dynamics. By adjusting our strategies at ACT Advisors, we aim to provide our clients with the best possible outcomes in this evolving landscape.
Doug English is a dedicated and experienced Certified Financial Planner® Practitioner at ACT Advisors, headquartered in Asheville, NC. With a deep understanding of market trends and a commitment to client success, Doug leverages his expertise to guide investors through complex financial landscapes. ACT Advisors is known for its client-focused approach and innovative strategies, helping to ensure that clients are well-positioned to achieve their financial goals. To learn more about Doug, visit https://act-advisors.com/about-us/our-team/doug-english/.