By Elias Kott Contributing Writer
As Students in Money Management’s fall semester kicks off, members of our student-run investment portfolio club have been assembled into different sectors. The main sectors that members of SIMM are split up into include: technology and consumer discretionary, financials and fixed income, healthcare and consumer staples, family business and industrials, basic materials and utilities.
Over the course of the semester members of each sector will have the opportunity to present stock pitches that they believe can improve and diversify our overall investment portfolio. After the stock pitches, club members will essentially be the deciding factor in voting either in favor or against purchasing or selling a stock.
Students in Money Management’s current portfolio value as of Tuesday sits at $467,253.42 which nears its all-time high.
All major US indices continued a streak of closing in the red for the day. As of Tuesday, the S&P 500 currently sits at 3,331.84 down -2.78%, Dow Jones Industrial at 27,500.89, down -2.25% and the Nasdaq Composite at 10,847.69 down -4.11% for the day. Crude Oil was down -7.37% and gold went up by .22% respectively. This marks three consecutive days of all three major indexes finishing in the red with the Nasdaq notably being down 10% during this span.
Technology stocks have driven much of the market recovery since the market crashed in March and now valuations have reached their highest levels in more than a decade. Perhaps a correction is inevitable considering that indices are trading near their all-time high despite poor gross domestic product and unemployment numbers.
A large factor that recently drove the market down included comments made by President Donald Trump about economically “decoupling” with China. Ultimately, this means bringing critical manufacturing back to the US with “made in America” tax credits, and imposing tariffs on companies that outsource and invest outside the country according to the president.
In addition, the CBOE volatility index, which is also known as the fear gauge of the economy, had been statistically low throughout the past few months but spiked by more than 20% over the last 5 days due to the looming presidential election on Nov. 3 and as well as signals of a potential burst similar to the dot com bubble.
Typically, whenever market prices sharply fall over a short period of time, the volatility index goes up due to panic selling and when market prices go back up and stabilize, the VIX falls back down.
Throughout COVID-19, the volatility index has seen all-time highs due to high deviations in market prices. Goldman Sachs recently stated that the “fear gauge” is flashing warning signs that haven’t been seen since the 2000 dot com bubble burst.
To learn more or to stay up to date with other SIMM related news go check out our website at https://www.sbusimm.org/ or follow us on twitter at BonaSIMM.
kottej18@bonaventure.edu
