Market insights and analysis

How dynamic, risk-managed investment solutions are performing in the current market environment

1st Quarter | 2021

Market insights and analysis

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Updates on how dynamic, risk-managed investment solutions are performing in the current market environment.

Don’t let your heart rule your investments

This week, I want to talk about a well-documented pattern of investor behavior that does not serve their best interests: letting emotions rule investment decisions. We originally posted a version of this article last year just before the COVID crash.

The new year brought new highs, with all major U.S. indexes trading at record levels last week. The Russell 2000 small-capitalization index rose 5.92%, the NASDAQ Composite was up 2.43%, the S&P 500 increased by 1.83%, and the Dow Jones Industrial Average gained 1.61%. The 10-year Treasury bond yield rose 20 basis points to 1.12%, as Treasury bonds fell for the week. Last week, spot gold closed at $1,849.01, down 2.60%.

U.S. equity markets posted gains in all three indexes last week. The NASDAQ Composite gained 2.43%, the S&P 500 gained 1.83%, and the Dow Jones Industrial Average gained 1.61%.

The markets saw some selling pressure last week as traders looked to lighten their exposure over the long holiday weekend. That combined with the doubt surrounding the passage of a COVID relief bill resulted in mixed equity markets last week: The S&P 500 fell 0.17%, the Dow Jones Industrial Average gained 0.07%, the NASDAQ Composite gained 0.38%, and the Russell 2000 led performance with a 1.72% gain. The 10-year Treasury bond yield fell 2 basis points to 0.93%, as Treasury bonds rose slightly for the week. Spot gold closed at $1,883.43, up 0.11%.

Early this morning it dawned on me that I have not looked at the global stock market in some time. As investors, we understandably tend to focus on domestic markets—even though there is a world of opportunity available to us. Those opportunities, including those outside of stocks, are why Flexible Plan builds strategically diversified portfolios.