Introducing Ithaca Wealth Insights - Vol 1
*Initially published on April 27th, 2020.*
Dear Valued Client,
Thank you for placing your trust in Ithaca Wealth Management. You are among the first to experience the future of wealth management. From an easy digital on-boarding process to fractional share investing, we hope your first few days and/or weeks with IWM and the Altruist platform have been pleasant, seamless, and uneventful.
On an ongoing basis, I will be reaching out to inform you of any updates at IWM or Altruist, news and analysis of what's happening in the stock market, and more.
So without further ado, here is the inaugural release of Ithaca Wealth Insights.
The Altruist iPhone app has been released! Download it here. You can view your account, investment holdings, and investment performance -- and in future updates you will be able to open new accounts and deposit or withdraw money, all from your phone. An Android version of the app will be released soon.Chart of the Week
West Texas Intermediate crude oil prices went negative for the first time ever last week, trading at -$37 per barrel. How is that possible? Owning a May oil contract means that you bought the right to be delivered a physical barrel filled with oil in May. Oil has suffered a significant drop in demand and a massive increase in supply since the coronavirus pandemic halted economies across the globe. And with oil storage tanks already filled to the brim, there are few places left to store oil, which means producers are literally PAYING you to take the oil off their hands. So if you have an empty swimming pool and wanted a new side hustle...
In all seriousness, at IWM, we don't invest in oil stocks. The secular trends of clean energy & electrified transportation, combined with the rise of ESG investing that's popular with pensions, endowments, and millennials, leaves little reason to go bargain hunting in the energy sector, especially when there are more compelling long term opportunities in the healthcare, technology, and consumer sectors.
Your Investments in the News
- Costco increased its quarterly dividend 7.7% to $0.70/share after reporting same store sales jumped more than 12% in March.
- Proctor & Gamble increased its quarterly dividend 6% to $0.75/share. The consumer goods company has seen sales accelerate more than 6% as grocery and big-box stores see a surge in bulk buying by consumers under stay-at-home orders.
- Abbott Laboratories has launched its third COVID-19 test, specifically a blood test that detects COVID antibodies. This is in addition to Abbott's molecular and rapid point-of-care tests. The company recently reported earnings that beat analyst expectations.
- BlackRock, Eli Lilly, Intuitive Surgical, and Thermo Fisher reported earnings that beat analyst revenue and EPS estimates. Verizon reported earnings that missed analyst revenue estimates but beat EPS estimates. JPMorgan Chase reported earnings that missed both revenue and EPS estimates.
Do you know someone you think would benefit from our low-fees, $0 account minimums, and investment management services? We'd love to help! Refer A FriendWhat We're Watching This Week
S&P 500 and 2800
At IWM, we utilize fundamental analysis to identify and invest in high quality businesses that are benefiting from long term secular growth trends, and we utilize technical analysis to gauge at what price levels in the stock market could we expect to be met with support or resistance, helping identify ideal price levels to add or reduce specific stocks.
As illustrated in the S&P 500 chart above, 2800 cuts right through the middle of the chart. If the bulls can hold the 2800 level, we'd expect the market to resolve to the upside over the next couple of weeks as more S&P 500 companies release earnings and the economy slowly begins to reopen. But if the bears prevail, and the S&P closes below 2800, we'd expect more downside volatility ahead, and perhaps even a retest of the March 23rd lows, which would represent a decline of 20% from current levels.
Whichever direction the market goes, now more than ever it's crucial that your portfolio is invested in an allocation mix of stocks and bonds that you are comfortable with. The right portfolio for you is the one that keeps you invested over the long term, through the occasional bear market or flash crash and out the other side. Please reach out if you'd like to review your risk profile and portfolio allocations.
More than 20% of the S&P 500 will report first quarter earnings this week, including the four largest companies in the world: Alphabet (Google), Microsoft, Amazon, and Apple. These mega-tech companies have been holding the market up since the sell-off began, so expect the market to take its cue from these four when they report. Other IWM portfolio holding companies who are reporting earnings this week include PepsiCo, Merck, Starbucks, Mastercard, McDonald's, and Honeywell.The Last Dance
Because we all need something good to watch during the quarantine/stay-at-home order, why not relive the NBA glory days of Michael Jordan and the Chicago Bulls in the late 1990's? The docuseries is packed with unaired footage from a film crew that had an all access pass to Jordan and the Bulls team for their 1997-1998 NBA season.
Stay safe. Stay healthy.
Founder & Wealth Advisor