Written by Michael Forrester – Founder, President, and CIO of High Note Wealth
Happy Fri-YAY, all. Just a couple of weeks left in 2020, so we are busy bees with year-end activities – little things that we feel really add up in performance over the years. Regardless of our business, we know the news doesn’t stop, particularly in 2020, so we have a few updates on the week that was.
In terms of schedule, the markets will be closed next Friday on Christmas Day and the following Friday on New Year’s Day. If you have any year-end questions, we are here and more than happy to help.
Optimism in the market continued this week with the Pfizer vaccine hitting the streets and the approval of a new vaccine from Moderna (with still 4 or 5 other players close to submission). Valuations (stock prices) are certainly elevated, but that doesn’t mean they will come down anytime soon. They can stay here or go higher for some time. It can make one feel nervous, but stocks making new highs is typically a bullish signal. It’s all part of being a market observer, so we will keep you very much in the loop.
The other story of note this week is that we STILL don’t have a stimulus deal done, but maybe we are closer?? In diving deep into this it seems the sticking point is one side wants liability waivers to protect businesses from getting sued for COVID handling, while the other doesn’t. So, if it’s down to one issue maybe there’s a chance? Probably not a good idea to hold one’s breath.
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From One Vaccine to Another
As mentioned above, Moderna’s COVID vaccine won FDA approval this week. The more the merrier. Well sort of. While addressing the same virus, each vaccination has unique distribution and safe-handling issues adding additional complexity for those working to get the shots into people’s arms. Based on the lack of clear information on distribution, one can imagine that this might muddy the waters. However, as the inoculation continues it should provide more data on effectiveness and side effects between the various vaccines. And, the world needs billions of doses, so yeah, the more the merrier. It is “the season” after all.
Here’s the announcement link.
Hackadelphia Goes Nuclear
It sounds like a Bruce Willis movie. Maybe it could be the plot to Die Hard 6: Die Harderest. Alleged Russian hackers found a hole into enterprise software developed by SolarWind, which allowed them to get into the National Nuclear Security Administration (like nuclear weapons, yes), multiple states and private businesses. In the movie, the hack would get into the biggest businesses in the world which would seem farfetched. Well, we got that covered as hackers got into Microsoft which, last time I checked, is one of the largest companies in the world that sells and develops SOFTWARE including SECURITY SOFTWARE. Not great. The evidence is still being collected as investigators try to trace where else breaches have occurred and what else could have been compromised. Based on the initial profile, this isn’t somebody sitting in their dimly lit Moscow apartment. This is a well-funded, well-orchestrated, and very sophisticated attack. This will be an interesting story to track with a new administration coming in and their own outlook on foreign policy.
Here’s one of many articles on the topic from NPR.
Diversification is Boring
Here at High Note a core philosophy in account construction is diversification. Certainly, it’s not nearly as “exciting” as picking a couple of stocks or going all-in on this or that investment fad. It’s the tortoise side in the tortoise-and-the-hare parable. We know how that ends, but there are points along the way that feel very underwhelming with stocks flying high and bonds, well, doing boring bond things. We get that. However, building and securing wealth long-term is very different than making money in a short time period. Added to that, sometimes diversification actually provides a better return than you think. Check out this piece from researcher, Charlie Bilello. Over the last twenty years, not only did bonds provide a less volatile ride than stocks but they also *whispers* outperformed. Interesting.
Full article here.
High Note Wealth LLC is registered as an investment adviser with the Securities and Exchange Commission (SEC). High Note Wealth LLC only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability.
