To the OSIF Board of Directors,
The end of the year is coming quickly, and it will be 2021 before we know it. In general, our outlook on the stock market for the next few months is bearish.
The presidential election is three weeks and there is uncertainty surrounding it. No matter which man wins the election, the opposing party is likely to cry foul and claim voter fraud. It could be that a case is taken to the Supreme Court to try and overturn the outcome of the election in a similar fashion to the 2000 presidential election. To combat this uncertainty, we have invested around $10,000 in GLD. Gold is a good investment during uncertain times because it holds its value well and can act as a hedge against market fluctuations. We predict that investors will begin to invest in gold as we get closer to the election and will continue to do so after the election. By investing now, we can capture some of that upside and increase the value of our portfolio.
The COVID-19 pandemic is not going away, and cases are currently increasing in the United States. Because of this, we believe that technology stocks will continue to succeed as people will still be working from home and spending time on devices. We are holding our position in QQQ, which contains a variety of tech stocks, as well as NVDA, which has performed well since our purchase. We are also holding our position in ABT as the firm has become a major player in the COVID testing space. The vaccine is still far away, and testing will remain important for the foreseeable future. For this reason, we increased our investment in XLV, which includes healthcare stocks. These firms will play a significant role in vaccine development as well as a likely spike in the pandemic as the flu season approaches.
We have recently invested in ITB and XHB which are both ETFs that respectively focus on home construction and homebuilding. Jerome Powell, Chair of the Federal Reserve, has repeatedly stated his intention to keep interest rates low so that capital remains accessible. We think that people will take advantage of this and purchase mortgages. Since home buying will increase, homebuilders will likely see their demand and value increase.
The market is likely to face uncertainty, but we believe we have properly diversified to fight against these risks and see growth in our future.
Sincerely,
Ben Whitten, Investment Analyst
