The work-from-home trade, the acceleration of online shopping and other trends advanced by the COVID-19 pandemic are here to stay and unlikely to reverse, Powell said.
He cautioned investors against being be scared off by market swings caused by the upcoming election, the saga surrounding the confirmation of a new Supreme Court judge and even day-to-day headlines on vaccines.
CONWAY GITTENS: Wall Street is on the verge of doing something that hasn't done in about a year, falling four weeks in a row. So what's next for the stock market? Let's find out with Greg Powell. He's the president and CEO of Five Plan Partners. So Greg, what happens here? More volatility or have we seen the bottom?
GREG POWELL: It's great to be here with you. I just want to say that you know we're probably going to continue to see volatility. You know, of course, with all the news media that's out there, we've got a presidential election coming up. We've got a Supreme Court nominee from the standpoint of economic conditions, unemployment.
Everybody still concerned about COVID coming back into place. You know, getting worse with the flu season. All this uncertainty is causing a lot of volatility in the market.
CONWAY GITTENS: So what do you do from here, especially given the fact that we have a jobs report that's going to be coming out a week from today?
GREG POWELL: Very much so. Yeah, that jobs report is very important. But let me say this. You have to determine your timeframe. If you're a short-term trader, that's one thing. But if you're a long-term investor, that's a whole different scenario.
The other thing is that I'm a big believer that everyone should have a financial blueprint in place. They've got to have a game plan. And with that game plan, then manage your money accordingly. So should we have a trade back, there may very well be long-term opportunities in this market.
CONWAY GITTENS: So let's talk about this game plan. Let's talk about these long-term opportunities. You're long communications, your long materials, and your long technology, right? Walk me through that.
GREG POWELL: Yeah, absolutely. And let me say this. The reason is let's use a common sense approach here. From the standpoint, look at the trends. Follow the trends. People are working from home. Companies are enjoying having that transition take place in some ways.
The trends are here. Telemedicine is up. People are talking to their doctor. So why not look at those things that we see long-term trends. There are those that would say, hey we'll eventually go back to the way we used to be.
But I fully believe these trends were already in place, COVID just made them happen faster. So communications, what we're using on a day to day basis to communicate with each other. Those companies, take a close look at. Technology, the need to upgrade all the technology that's out there that you're using, you know, in your workplace, your home.
You know, the virtual meetings, the interviews like you and I are doing, all of that. Those are trends we can embrace. And then materials, we're in a low interest rate environment here. That's a positive for materials. And if you look over the past few weeks, the materials sector has been the one sector that has really been performing.
CONWAY GITTENS: So I'm wondering with this long-term game plan, what would you be doing with the market? Would you be a buyer on the dips, in terms of the communications and technology? Or would you be looking to take some money off the table for a while, and come back later on?
I mean, because I just want to-- I just wanted to ask you that. Because the bulk, not just the bulk, the entire rally since March, right, has been on the back of technology and communications. So what do we-- is it too late to chase that tail here? Do you wait for another entry point?
GREG POWELL: Well, and again, that's a great question. Because of the fact, in a broad based sense, that if you're tying it to your financial blueprint, and looking at quality equities like that, that's great.
There are positions you may already have in your portfolio, in technology, communications, and materials you want to just add to on the dips. At the same time, we have to factor in what's your age?
What's your goal plan? You know, in other words, ultimately as I like to ask people, if you had to choose between your money outperforming the S&P 500 index, or achieving your dreams and goals, which hand would you pick? In 38 years of being in this industry, no one's picked S&P 500.
It's always about dreams and goals. So in doing your strategies here, if you have trade backs like that, don't think about just the immediate. Think about, you know, this is an equity position that I feel like is a long-term trend. And over time, I can see this company continuing to innovate, also reinvent themselves in terms of their business model. And with that, there should be good returns and earnings for the investors.
CONWAY GITTENS: So am I safe to interpret what you just said as you saying that you're still a long-term buyer of tech, materials, and communications?
GREG POWELL: Absolutely. And let me say this. From the standpoint, if you have a plan in place, you're able to stick with that plan. The anxiety that the short-term traders can anticipate at times, that anxiety can possibly go away because you know your rate of return is, and what rate of return you need over a period of time to get you to those goals.
So yes, I fully believe that we are going through a whole disruption period right now, in terms of business models. And we've got new business models coming to life, tracking these trends. And at the same time, there's some old business models that will definitely change, and go away.
CONWAY GITTENS: All right, great. That's some strategy tips there from Greg Powell. He's the president and CEO of Five Plan Partners. I'm Conway G. Gittens, and this is Reuters.