Announcer:
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:
Thanks, Brandi, appreciate it.
Brandy Auterson-Hurst:
So what’s something investors might be missing with all the excitement in today’s stock market?
David Nelson:
Boy, there’s a lot of things happening I don’t think that are necessarily good, but we’ve seen a big jump in speculative trading, essentially built around technology companies that are unprofitable. These meme stocks, it’s a term that’s come about in the last five years, give or take, and a lot of individuals as far as pouring money into these type of speculative trades. There’s a major bank that’s basically put together a speculative trading kind of index that they look at, and what they’re trying to attract is basically, and our chart I think gives a nice visual on this, they’re looking at short-term and long-term after periods of time like we find ourselves in today.
The conclusion of it is short-term, oftentimes we have these terrific returns that are taking place, but mid-term and long-term, now mid-term being a year, two years out, and long-term being three and five years out, after we’ve had periods of time like this basically what we find is we have extended periods of time where the markets underperform over a period of time. Not trying to be a negative Nellie here, but the reality is we’re in a period of time that most people do not want to see where we have this type of speculation.
Brandy Auterson-Hurst:
Okay, so what should investors take away from this?
David Nelson:
Well I’d start by saying understand as far as when again, we have periods of time like this, that underperformance is almost a guarantee that it’s going to happen as far as going forward. So again, be careful as far as the type of investments that you’re investing in, try to protect your capital as far as going forward, and it’s going to be probably quite important to make sure that you do that.
Brandy Auterson-Hurst:
If you missed any of our discussion, we’ll make it available for you on OurQuadCities.com.
Past performance is no guarantee of future results. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including total loss of principal.
Indices mentioned are unmanaged and cannot be invested into directly.
This video includes a paid appearance.