Biden Inauguration and GameStop Market Commentary

There is so much uncertainty today…

  1. The Coronavirus continues
  2. The new administration’s agenda and Biden’s numerous executive orders
  3. Continued massive borrowing of money to overcome the impact of the Coronavirus and how could this ultimately create high inflation and higher interest rates
  4. And then last week, out of nowhere, Reddit users manipulated the price of a company named GameStop against hedge fund managers.

 

In addition to the above, 24 hour news channels and professionally paid doomsayers are making up all kinds of conspiracy theories to scare people into buying high commission gold and silver. According to them, you would think mankind and the world as we know is about to end.

With all this “NOISE”, the team at CIS has received many phone calls, emails and questions about these concerns.  Yet the S&P 500 index is down less than half a percent over the last month, as of January 28, 2021, nowhere even close to correction territory.

My advice? Pray and seek God’s wisdom. Turn off all the “noise” (i.e. social media, the news, the internet and TV) for a few days or maybe even a few weeks. Use the extra time to go for a walk, go hiking, or go fishing in the many parks surrounding all of us. Just find ways to enjoy God’s creation and, while you’re at it, study Matthew 6:25-34.

Matthew 6:25 – Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more than food, and the body more than clothes?

What will CIS Wealth Management Group do? We will continue to our job by:

  1. Using long-term Biblical principles and wisdom for managing money that has worked through many good and bad times.
  2. Never allow emotions, feelings, social media or professional doomsayers with their conspiracy theories to dictate to us how to manage our portfolios.
  3. Continue investing in Biblically-Responsible, Values-Based companies that do not violate Biblical principles (Ephesians 5:11).  They serve mankind with the things we all need like food, clothing, shelter, technology, healthcare, transportation, and more.
  4. Stay diversified by the wisdom given to us in Ecclesiastes 11:2 and 3:1-8 using long-term strategies built for good and bad times like our “bucket investment strategy”.
  5. Consistently, monitor and actively manage all our portfolios using a forward-looking approach

 

What about GameStop? To be frank, it’s an insignificant company that produces nothing of lasting value, has consistently earned a net loss over the last few years and has been a terrible investment until last week’s manipulation tactics which falsely drove the stock up.  In my opinion, society does not need companies like GameStop to survive.

It is sad to see how users of the social media platform Reddit manipulated the price of GameStop to far exceed any underlying value of the company to try to hurt hedge funds. In the long run, this will not be significant to the overall markets because the pricing is not sustainable. My opinion? Some people may be going to jail for front-running this stock for their own personal gain at the expense of thousands of naïve and novice investors. This is not the first time this sort of thing has happened, and it will not be the last. Anyone remember Enron?

As always, the team at CIS is here to serve you. Feel free to comment via email reply or phone call to any of the staff.

Bob Barber – Senior Wealth Advisor and Owner

Want to hear more?

Bob’s latest podcast episode dives further into the issues above. Click below to listen!

Subscribe: Google Podcasts | Spotify | Stitcher | RSS | More

 

The views expressed represent the opinion of CIS Wealth Management Group (“CIS”). The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While CIS believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and the CIS’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. Past performance is not indicative of future results.