The S&P 500 hit its 30th record close of the year on Monday, prompting some investors to consider selling. However, Tim Urbanowicz, Head of Research & Investment Strategy at Innovator Capital Management, advises against it. He believes that reaching an all-time high is not a signal to sell, but rather a great time to stay invested in the equity market.
Urbanowicz explains that historically, after hitting all-time highs, the average 12-month return is around 12%, with positive returns 77% of the time. He reassures investors that the current frequency of all-time highs is not abnormal, citing similar patterns in the past. He emphasizes the importance of staying in the market, even amidst concerns.
In the next 3 to 4 months, Urbanowicz highlights the profitability of being in equities, particularly during a period of disinflation. While acknowledging potential future uncertainties, he recommends focusing on large-cap and tech stocks due to their resilience to rising interest rates.
As the election year approaches, clients are beginning to show interest in potential policy changes. Urbanowicz advises clients to stay focused on the consistent trends of both administrations, particularly in government spending that could impact interest rates and the economy.
Overall, despite looming uncertainties, Urbanowicz encourages investors to remain invested in equities and stay vigilant for potential market fluctuations as the year progresses.
Vocabulary List
- Prompting /?pr?mpt??/ (verb): Causing or bringing about an action or feeling.
- Reassure /?ri?????r/ (verb): To make someone feel less worried or fearful.
- Abnormal /æb?n??rm?l/ (adjective): Deviating from what is normal or usual.
- Emphasize /??mf?sa?z/ (verb): To give special importance or prominence to something in speaking or writing.
- Profitability /?pr?f?t??b?l?ti/ (noun): The ability of a business or activity to earn a profit.
- Equities /??kw?tiz/ (noun): Stocks and shares that carry no fixed interest.
- Particularly /p??t?kj?l?rli/ (adverb): To a higher degree than is usual or average.
- Fluctuation /?fl?kt?u?e???n/ (noun): An irregular rising and falling in number or amount; a variation.
Vocabulary List:
- Prompting /ˈprɒmp.tɪŋ/ (verb): Causing or bringing about an action or feeling.
- Reassure /ˌriː.əˈʃʊər/ (verb): To make someone feel less worried or fearful.
- Abnormal /æbˈnɔː.məl/ (adjective): Deviating from what is normal or usual.
- Emphasize /ˈɛm.fə.saɪz/ (verb): To give special importance or prominence to something in speaking or writing.
- Profitability /ˌprɒf.ɪ.təˈbɪl.ɪ.ti/ (noun): The ability of a business or activity to earn a profit.
- Fluctuation /ˌflʌk.tʃuˈeɪ.ʃən/ (noun): An irregular rising and falling in number or amount; a variation.
How much do you know?
