Jim Niedelman:
Time for another edition of 4 Your Money. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. Great to see you David, as always.

David Nelson:
Thank you, you as well Jim.

Jim Niedelman:
So obviously we’re approaching the end of the year with a lot of broad measures of stock prices now at all time highs, what do you think has been driving this year end rally?

David Nelson:
Well I think there’s several things. First is clearly the vaccine, that’s the big one. It’s certainly helped many, many parts of the market, instead of just technology winning we’re now seeing the broadening out that’s taken place. 2021 as far as the projected earnings for corporations have been coming in and looking quite good. And lastly, the thing we’ve been hammering on for quite some time is the government stimulus. Now the chart that I brought along today, just going to give people a nice visual of it, and I’d like folks to focus on the blue initially. And what we see as far as in the blue is these are the initial unemployment claims, and what we saw as far as the beginning of the year were these numbers just off the charts, number of claims that were coming through. What we’re seeing now as far as in this, and we’re looking at four months here as far as in blue, and we see that the trend was down up until just quite recently.

David Nelson:
Now, as far as in the red, that’s the stock market, that’s the S&P 500, and that’s trying to give people an idea as far as what are stocks doing. What we see here as far as with the yellow line, we’re showing that the general trend for the two and they’re moving in sync, and now they’re moving in sync again, which is contrary to what people would think. And in other words, claims are going up and yet the stock market is going up as well, which is really unusual from the standpoint of this isn’t normal. Now, the reason for this is that the saying that goes along with this is bad news is good news. And the bad news relating to this is claims are going up, which should translate into the federal government stepping in with more stimulus.

Jim Niedelman:
You talk about this not being the expected pattern that we see typically. So what are some of the ways you see this as possibly turning out?

David Nelson:
So I think there’s a couple outcomes here. The first is that the stimulus that’s been already given has been factored in as far as stock prices, they moved higher. And if we don’t get more, what we’re going to see, and if we have gridlock as far as in Washington, chances are we’ll use the saying look out below because it might be really, really ugly on the downside.

Jim Niedelman:
So put all this together for us, what can people watching at home do to help manage the risks that might be in their portfolio?

David Nelson:
So I think the key is, are you comfortable with the amount of risks that you’re taking as far as in your portfolio? And if you are, we recommend staying the course, but you need to understand what you own. We also believe a lot of future growth. The good news has been pulled forward as far as in the market, so that could leave investors really contemplating a hard as far as about taking some profits now from some of the areas that have really, really done well, and maybe repositioning that money as far as in some areas that haven’t done as well. It’s a little rebalance that would be taking place. And finally, and I got to emphasize this, this is really, really important, pay attention the risk going forward. We believe in tactical money management and not just putting money in, a rules based approach, and when the rules start being violated, it’s probably time to take some more chips off the table to protect the gains that you’ve enjoyed this year.

Jim Niedelman:
David Nelson, thanks so much for joining us. As always, in case you missed any of this discussion, we have that available for you on OurQuadCities.com.