Following a session in which investors saw gains across the major indexes, Wealth Consulting Group CEO Jimmy Lee says investors need to remember that midterm election years tend to be more volatile in general.

Closing Bell

Stocks End Week on High Note, Major Indexes Snap Losing Streaks

So I do want to bring in our guest jimmy lee ceo of, well, consulting group jimmy, it's good to see you. I know you handle many people's personal finances, savings for the long term and retirement accounts. What do you make of the stock market action this week? Well, kristen thanks for having me on uh, you know, going into the weekend last week. Uh boy, I I felt that there was never so much as much pessimism in a long time from really investment professionals about where the economy was, economy was headed and stocks. And you know, everybody was talking about that. We haven't had the capitulation yet, you know, that we typically get before we hit bottom. And maybe that's true. But it kind of made me feel as if maybe we were getting close to bottom because of so much pessimism, pessimism and negativity. And as we've seen this this week, you know, we've had some mixed earnings reports from retailers, but the consumer still is very strong and there's certainly spending money in travel related areas as we've seen, you know, money spending shifting from durables to services. And so I actually think that a lot of investors need to be reminded that midterm election years are volatile historically and that this year, um, you know, being down as much as we were last friday in today, entering into bear market territory around 20% of S. P 500. The average midterm election year goes down on average by negative 17% since 1950 according to factset one year later, after the low, uh the S and P 500 is up an average of 32%. So volatility even though this year's story is different during midterm election years is normal jimmy. One of the questions that I have is, what's your recommendation to your client base? How are you suggesting they navigate, navigate yet a still volatile market in the year ahead? Well, you know, try to remind our clients as much as possible. What we talked about when, when they first became clients, um, you know, if you're gonna invest in stocks, what's going on right now is very normal, very typical. So bear markets happen, you know what every 3-5 years depending on what time period you look at. And when we have a bear market, the the averages, you know, you're going to go down by more than a third. You know, so we haven't even come close to that yet, corrections happen much more often than that. And so you know, if you're gonna be investing in stocks, this playbook is something that's not unusual that we're going through today. And the playbook that we should have is that instead of panicking and deciding when to get in and out of the market, it's really if you have any dry powder or assets that have not gone down that you can rebalance and and buy equities cheap when there is value. You know, we've seen a lot of the big growth names um get just decimated right in terms of their stock price along with a lot of those high valuation names that we've been talking about and warning investors about all year long and last year are all the other great companies. Um That also went down with it. So now I think investors are finally starting to see some value. And so I think it's a good time actually to for clients to think about putting dry powder to work if they have cash Jimmy, I want to run through how the major indexes did on the week. Again, the best week for some of these major indexes since the presidential election results came in in November of 2020 for the week. The s. and P up 6.6%. The Dow hired by 6.2% and the NASDAQ leading the way up 6.8%,, investors were buying stocks but they were also buying bonds. Are we out of the woods. Do you think that stocks can continue to catch a bid going forward? You know, I think we're gonna remain volatile kristen. So unfortunately I think maybe you know at 20% on S. And P. There's a lot of support there as we've seen multiple times. But I think when we continue to see a lot of volatility until we get some resolution, you know, from the war in Ukraine. We saw some some positive news on inflation, you know with interest rates going higher without the Fed having to fully increased rates yet, you know, we're starting to see demand come down. I know that the consumer is still relatively strong, but in certain areas like housing and auto sales and some of these other things, um you know, there's gonna be weakness in areas that we didn't have before, that were growing very fast. And so, and it's also affecting, I think the business community in terms of, you know, borrowing money for investment and paying higher interest rates on debt, affecting profitability. So I think that the demand side, which is what the Feds trying to do has already come down and I continue to see inflation getting better. So, and especially as the supply situation gets better. So I think while while it's a good time to put some money to work, like I said, I wouldn't put it all the work overnight and I think we're going to get more volatility. I think people will get more chances. Okay, Jimmie lee ceo of wealth consulting group, jimmy, thanks so much for coming on the show and sharing your insight. We appreciate it