Payne Points of Wealth

The Mother of All Stock Rotations, Ep 15

November 26, 2020

We told you that you could see a stock melt-up going into the end of the year, and now we're here. Money's come off the sidelines in droves! Money managers are getting reinvested, and the big question comes: Is this it? Have we gotten the melt-up? We are also going to hit on what you should be doing with your wealth plan right now and how you should be setting that up. We're going to break it down for you, so be sure to check out the episode!

You will want to hear this episode if you are interested in...

  • Revenge of the nerds! [1:13]
  • Growth that’s made everything else pale in comparison [3:04]
  • Don’t get tricked into thinking you’re diversified [5:13]
  • The market doesn't care about valuation...until it does [6:08]
  • The Tipping Point [9:05]
  • Knowing what you own and why you own it [10:45]
  • Taking money from your portfolio [12:42]
  • Something more important than just a good stock idea [16:02]
  • Hidden Facts of Finance [17:36]
  • Lending money where you’re guaranteed to lose [19:02]
  • ETFs cross a milestone for the second time ever in 2020 [21:33]

Tech’s outperformance has “normal stocks” paling in comparison

We’ve made a killing in tech stocks over the last 10 years. Its growth has way outperformed what it does historically. Historically, it’s been normal to average about 10% per year. We've seen 18% per year for the last 10 years even though the rest of the value and small-cap companies have done about average. It's not that these small-cap companies are horrible performers, it’s that growth has been so ridiculous over the last 10 years, it makes everything pale in comparison.

This week on the tipping point...knowing what you own and why you own it!

Up until the pandemic hit back in March, many people would ask why they own bonds? They don't pay very much. It costs a lot to buy them. However, as the pandemic hit, bonds were the only thing in their portfolio that was profitable, and now you have the ability to take some profits from the bonds and buy back into the market when it's low. A bond is something that is negatively correlated. That just means it goes up and down differently than the rest of your financial assets. For more on this check out the episode!

This week’s hidden facts of finance

It may surprise you that when a Democrat takes over the presidency from a Republican (which, for the record, we're NOT saying has happened yet) the average cycle return has been 43.6%. What usually shocks everyone to find out is that a market under a Democratic president historically has done better than a market under a Republican president. Just so you don't get too concerned, it doesn't matter if it's a Democrat or Republican because historically the market's always going up as long as SOMEONE is sitting in the oval office! Check out the show for more hidden facts of finance!

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