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4 Your Money is brought to you by NelsonCorp Wealth Management.
Brandy Auterson-Hurst:
It’s now time for 4 Your Money. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. Welcome back, David.
David Nelson:
Thank you very much, Brandy.
Brandy Auterson-Hurst:
So as the markets continue to go higher this year, are there any concerns that stand out to you?
David Nelson:
Always concerns. The rally I think has surprised a lot of people, with the Fed doing what they’ve done as far as increasing interest rates, bank failures, we’ve had several of those. And so, again, this is a little unusual as far as to have this type of rally as far as taking place with that backdrop. The best rallies are always the rallies that are across the board where you have small-cap, mid-cap, large-cap, international. That certainly isn’t the case right now. We’ve got some currents as far as underneath that that we’re really not liking, that being large-cap growth being primarily the item that’s carried the market. That’s technology and things of that nature.
The chart that I brought today is basically looking at just that concept, and that being the S&P 500, the way it’s normally weighted, which is cap-weighted, which is a fancy way of saying size matters so it’s the bigger companies get a lot bigger weighting. And then you have the S&P equally weighted as far as on this chart as well, so all stocks that index are treated equally, which you see there is a pretty big gap, and it’s the biggest gap that we’ve seen since just prior to the .com bust.
Brandy Auterson-Hurst:
All right, so what does this mean for viewers’ investments?
David Nelson:
Well, I don’t think necessarily this is bad news if this corrects itself and we see some participation from the small and the mid-cap stocks, but I certainly wouldn’t be complacent as far as this point in time. The risks are elevated as far as in primarily the large-cap area these days.
Brandy Auterson-Hurst:
All right, David. As always, thanks for joining us.
David Nelson:
Thank you.
Brandy Auterson-Hurst:
If you missed any of our discussion, we’ll make it available for you on ourquadcities.com.