Greetings!
I hope this note finds you well and enjoying this early part of February! Spring will be here in just a few short weeks!!
You have likely received some communication from Kestra (my broker/dealer) about an upcoming new fee for paper statements. If you have an e-mail address and you are comfortable receiving your statements, trade confirmations and tax documents via e-mail, please let us know and we will be happy to help you make the transition.
E-statements are encouraged for a number of reasons. Security is the primary reason. Sending documents via e-mail eliminates theft of documents from our struggling mail system. It also saves money and reduces waste. We are available to help you make the transition. Don't hesitate to give our office a call!
Of course if you prefer to continue receiving paper statements that's fine too. In that case there is nothing to do! You'll just keep receiving statements like always.
In my last e-mail I let you know that we would be holding a webinar with Brian Casey, longtime executive at the American Funds...one of our country's oldest and most revered mutual fund families. Brian will talk to us about what we can expect in 2021 from the stock market and from the economy. He'll also discuss what we can expect over the long term. The webinar will take place over Zoom on February 18th at 11am. I hope you can join us. Please "RSVP" if you would like to attend and we'll send you out a meeting invitation. Also, this is YOUR meeting! Please send us any questions that you'd like Brian to address during the webinar. The format for the webinar will be comments from Brian followed by a Q&A session....but since we are doing this over Zoom, I'll ask Brian your questions so that we aren't talking over each other.
Finally, I want to address what is happening in our stock market with Game Stop, AMC Movie Theaters and a couple of other stocks. In the most simplistic terms, hedge funds make bets that struggling companies will experience a drop in their stock prices...and then they profit from it. They do this by short selling. This is when an investor (hedge fund) borrows shares of a company's stock and immediately sells those shares. They still have to give back the shares they borrowed though so that investor hopes to buy back the shares at a lower price and return them to the lender. The difference in the sale price (higher) and the purchase price (lower) is what the investor pockets.....and it's a gamble. What has now happened to the hedge funds is something called a "short squeeze." A mass of supposedly amateur investors banded together to buy shares of Game Stop, for example. This drove the price of the stock up much higher, forcing the hedge funds to buy their shares at a much higher price (remember they have to buy shares to pay back what they already borrowed and sold). This action has been catastrophic for a number of hedge funds who placed enormous bets on the falling price of stocks like Game Stop. Unfortunately investors are piling into these few stocks creating bubbles that will eventually burst and leave many with empty pockets.
I look forward to hearing back from you about our upcoming webinar! Until that time, I wish you good health, peace and of course prosperity.
Johanna