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 for the invite. Appreciate it.
Brandy Auterson-Hurst:
So David, what stands out to you about the current market environment?
David Nelson:
A lot of excitement out there. What really, I guess, stands out is the correlations or the lack of correlations. Correlation is a topic we’ll focus on here today, but basically what it boils down to is it’s a manner in what you look at stocks and whether they’re doing their own thing or where they’re moving in conjunction with everybody else.
And so the chart that I brought along is a nice visual that will illustrate this concept and when we see those spikes there, like we’ve seen as far as periodically, the spikes on the upside are typically when the market is in a pretty stressful-type type situation.
Somewhat similar to the end of last week. But what we see in the far right is very interesting and that is that where it’s circled is one of the lowest levels that we’ve seen in the last 15 years.
And again, what this is essentially telling people, I believe what it’s telling people is that things are somewhat calm and correlations are very low and so things are in sync and it’s a good thing as far as market returns are concerned.
Brandy Auterson-Hurst:
Okay. So what about investors? What does this mean for them?
David Nelson:
Well, there’s no question. It’s a reminder when you look at this chart as far as these spikes and how dramatic they are, oftentimes they use the term as far as that when market’s correct and we have tight correlations, we throw the baby out with the bath water. It’s a common term as far as, and Wall Street.
We don’t have that today, but things can turn on a dime and I think people should be aware of that. But right now things look pretty good.
Brandy Auterson-Hurst:
All right, David, as always, thanks for joining us. 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.