Medicare Agent News: How To Invest This Fall

Tuesday, October 5, 2021

How To Invest This Fall

By Nicholas Jasinski | Tuesday, September 7

Looking Ahead. Investors returned from the long Labor Day weekend to a mixed day of trading, with growth stocks generally outperforming value. Industrials and energy were among the worst off sectors in the S&P 500, while technology and communication services led. It was a good day for the likes of Netflix, Apple, and Facebook.

The Nasdaq Composite managed to eke out a 0.1% gain today—good enough for a record-high close—while the S&P 500 slipped 0.3% as 411 of its components declined. The Dow Jones Industrial Average lost 0.8%, dragged down by losses from Boeing, Amgen, 3M, Honeywell International, and Merck.

Higher bond yields, meanwhile, weighed on the traditional income-generating sectors. S&P 500 real estate and consumer staples sectors both closed down 1.1% and utilities lost 1.3%. The yield on the 10-year U.S. Treasury note rose 0.05 percentage point today, to 1.37%.

With the cultural end of summer upon us and kids going back to school, a pause between earnings seasons, and several notable catalysts on the monetary and fiscal policy fronts ahead, the market's focus is turning to what comes next in this accelerated economic and market cycle. Wall Street's 2022 year-ahead outlooks are just around the corner.

I took an early swing at that in this past weekend's Barron's, with a fall market outlook. The consensus among Wall Street market strategists and CIOs is that things are going to get a bit rockier in the coming months, as the Federal Reserve begins to pull back, economic and corporate-earnings growth decelerate, and wildcards like potential higher corporate and personal tax rates give investors more to worry about. The recovery is far from over and growth will undoubtedly remain strong—but it just won't be as explosive as we have seen in the past few quarters, and that will make investors' choices a bit more challenging.

“The everything rally is behind us,” said Saira Malik, chief investment officer of global equities at Nuveen. “It’s not going to be a sharply rising economic tide that lifts all boats from here.”

Instead, stocks of the companies that can best control their own fates and exhibiting relatively defensive characteristics had the most fans on our panel.

Here's an excerpt from the fall outlook:

With stocks trading for about 21 times the coming year’s expected earnings, bonds yielding little, and cash yielding less than nothing after accounting for inflation, investors face tough asset-allocation decisions. In place of the “everything rally,” which lifted fast-growing tech stocks, no-growth meme stocks, and the Dogecoins of the digital world, our market watchers recommend focusing on “quality” investments. In equities, that means shares of businesses with solid balance sheets, expanding profit margins, and ample and recurring free cash flow. Even if the averages do little in coming months, these stocks are likely to shine.

The easy money on the index level has been made, the six market strategists and CIOs we consulted argue. They see the S&P 500 ending 2021 at 4585 on average, only slightly higher than today's close of 4520. Next year’s gains look muted, as well, relative to recent trends: The group expects the S&P 500 to tack on another 6% in 2022, rising to about 4800.

Read all of Barron's fall market outlook here.