[Stu from NYC]

Originally Posted by CoachKandSportsguy

maybe yes, maybe no, but the market is a function of global liquidity and corporate expectations. Liquidity, or money in the system has exploded recently. So if the excess liquidity goes into the high quality stocks, in general, that means that the active money goes into the higher weighted components of the SP500. Remember, passive or index funds, in which many have their retirement accounts invested, are price insensitive buyers. Active management are price sensitive buyers and sellers and determine the price of individual equities. So how is an active manager to beat the index, if that is his benchmark? by buying 80% index fund, and the last 20% his favorites to beat the return and the large cap weighted stawks. This is called closet indexing or a tilted portfolio to beat an index return.

So with most of the money going into the indexes and large cap weighted stocks as the strongest to survive the economic recession, the indexes appear to be "going crazy" Today is a correction but also the election is coming up and there looms a constitutional crises of a legal happy president trying to cause chaos to nullify the election. (my prediction of the future, and the future hasn't finished being written on this election, so save your typing if you are going to tell me i am wrong.) which may increase volatility and selling due to the uncertainty as the election nears. in bull times, buy the rumor and sell the news. IN bear market times, sell the rumor and by the outcome.

However, the work from home will be temporary in mass, so lets not extract long term outcomes from a short term influence. all pandemics have an end, and this one will as well. The issue is always how fast and at what damage. the worst is past for the virus, but there never has been herd immunity for a corona virus, nor a reliable vaccine, so expect the return to the office to be slow over time with some set backs of course. Also from being in corporate discussions about back to work, people adapt, and are creative so expect new solutions which one hasn't thought of before to surface to add to productivity.

And as always the future is uncertain, sometime more uncertain than at other times.

sportsguy

Interesting analysis, who knows what the changes due to the virus will ultimately bring but think work from home will be around for quite awhile bringing some interesting changes to the economy and our lives.