- Summary of June 2020 in the economy - Stock market is still uncertain
- Monthly portfolio update: Fairly stable month: long-term bonds down, stocks, gold and commodities up
- Book tip: Balanced Asset Allocation: How to Profit in Any Economic Climate by Alex Shahidi (link at the bottom of the post)
- In case you missed it: Deep Dive post about how to hedge against inflation on my Patreon page was published earlier in June
I am so glad that you have found your way to my June portfolio update of the All Seasons Portfolio blog. It is a rainy afternoon here in Stockholm that I am writing this in early July. Still keeping social distancing and working from home quite a lot. Hoping to see a change soon, for the benefit of all fellow Europeans. We really need to get the economy going again, as I am sure you agree. Hope you have been able to keep your job though.
This month, I have come to the conclusion that the time for stocks is now, at least if you look at what is going on in the markets. Not sure if I am convinced this is the way we are heading, so I prefer to diversify my portfolio properly.
The stock market have bounced back from the steepest downturn in memory, and what looks like the shortest recession in history if you only look at the stock market development. The stock market is almost back at similar levels to where they were before all hell broke loose in February, regardless but S&P 500 saw almost flat development over June with +1.8%. Mostly, the climb in stocks were driven by tech and "stay at home" companies, as Nasdaq composite rose 6% over the month.
On top of that, central banks and governments over the world are launching new stimulus packages by the week, as we covered in last month's update. The two acronyms TINA and FOMO are the main forces driving the markets upwards. As a reminder, these stand for "There Is No Alternative" and "Fear Of Missing Out", meaning that investors see that there is no alternative to stocks to achieve return, and investors are afraid to be left at the station if they do not jump on the train as soon as possible. Both of these are driving great amount of money into the stock market, increasing demand.