• S&P 500 Sector Performance for November 2022

    As volatility declined,
    all 11 S&P 500 sectors advanced for the month

    Over every single time period, sector performance will be driven largely by factors one would expect, such as the overall state of the economy, underlying corporate earnings, current and predicted interest rates, and inflation, among other factors.

    Reviewing the sector performance for the month of November (a very short time-period), two things become very clear:

    • First, sectors do not move in lock-step with one another and will often provide very divergent returns for investors – depending on timing and the current economic climate and
    • Second, November continued to see very real divergence in sector performance, with the spread between the best (+10%) and the worst (+0.11%) being unusually wide.

    Sector Highlights Through November 2022

    For the month of November, sector performance was excellent, as all 11 sectors advanced healthily. For the month of October, sector performance was very good, as 9 of the 11 sectors were up for the month, with 7 up more than 5%.

    It is also interesting to see the difference 11 months can make, as investors were reeling in January when 10 of the 11 sectors were red (with only Energy gaining that month); March saw 10 of the 11 positive; April and May saw a mixed bag; June was all negative; July was overwhelmingly positive; August was mostly negative, September was all negative; October was almost all positive; and November was all positive. That’s volatility.

    Here are the sector returns for the month of November and October (two very short time-periods):

    S&P 500 SectorOct. 2022Nov. 2022
    Information Technology+5.66%+4.42%
    Energy+23.71%+1.25%
    Health Care+8.05%+4.58%
    Real Estate+2.92%+6.52%
    Consumer Staples+6.89%+5.54%
    Consumer Discretionary-1.64%+0.11%
    Industrials+12.37%+7.20%
    Financials+10.57%+6.06%
    Materials+8.58%+10.51%
    Communication Services-1.75%+5.05%
    Utilities+0.00%+5.51%

    Source: FMR

    What Does It Mean for Investors?

    At a very basic level, the differences in returns for the 11 S&P 500 sectors support two fundamental principles of financial planning – asset allocation and diversification.

    At your next portfolio review, let’s revisit the differences between asset allocation and diversification. And we can discuss how to ensure that your portfolio is consistent with your risk profile and personal goals.

  • Elon Musk’s Twitter Takeover

    It has been a busy month for the richest man in the world, Elon Musk. The CEO of SpaceX and Tesla, Inc. has an estimated net worth of around $252 billion and a penchant for free speech, specifically on social media. A Twitter user since June 2010, Musk has faced some controversy through his choice of Tweets over the years. In August 2018, he claimed in a tweet that he was taking Tesla private at $420 per share. The SEC fined Musk and Tesla $20 million each, concluding that the tweets had no basis in fact and hurt investors.

    This time around, Musk moved more deliberately and was almost compliant in his quest to acquire Twitter for $44 billion and take it private.

    For Twitter shareholders, they will receive $54.20 per share in cash once the deal meets regulatory approval and other closing considerations. Even if you don’t hold Twitter stock, the changes Musk could bring to Twitter may impact how other social media and tech companies operate, like Facebook or Apple. As a private company, Twitter won’t have to report their financials in the same way as other competing companies, which means less transparency overall in the space. The following article outlines how exactly we got here in such a short time frame:

    Click to Read Article