Matt Powers, managing partner at Powers Advisory Group, joins Wealth to share strategies for investors to stay nimble, identify entry points, and manage risk amid the noise. Powers notes that investors are navigating market swings that "rival 2008 and 2020."
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And Matt, I mean you're expecting continued volatility in the short term, what tips do you have to help investors manage some of that unpredictability?
Hey Brad, how are you? Uh good morning. So you know, market volatility, it's not going away. Uh we know it's here to stay for the foreseeable future, but we we just have to get used to it. The volatility the levels right now they rival 2008 and 2020, and one headline clearly pushes the market. We just had it the other day, but completely unpredictable. So uncertainty right now appears to be maybe the only certainty that we have. And the S&P 500 forecast, they range widely, you're looking at 4,000 to 6,000, and we just think forecast right now, they're just not relevant. It all hinges on Trump's stance on tariffs and we've had three uh three swings of over 5% in April alone, and VIX is at 52, which is the highest point since March of 2020. So no surprise here. Um, and that's you know, all one one interesting thing is um nine out of the 11 sectors have actually outperformed the S&P 500 year-to-date, but that's primarily due to the decline and the shared leadership at the top.
And so as we're thinking about areas that investors might be looking to hide money right now in the midst of volatility, where are some of those zones that you're finding right now?
Yeah, you know, it's uh we can say this. It's contrarian, maybe unpopular, you know, but we're always looking at entry points, like entry points is key for us. So we don't blanket love these sectors, but discretionary and industrials, you know, there's specific names in there that uh look like they're at attractive values, and you know, it's a you could say you're already positioning defensively by buying inexpensive companies that have been beaten down from tariffs. But a lot of the risk has been taken out of the price on these, so um here's where we're looking. So we we look for companies that have strong, steady dividend growth, strong fundamentals, attractive relative valuations, and reasonable payouts of cash flow. So uh surprisingly Dick's Sporting Goods, we like them. Um the shares are off 21% year to date. Um very attractive valuation obviously, prices come down, but their dividend, they've grown it over the past three years, 42%, and over the past two years, 24%. So if you're a dividend growth investor, a decade ago you're getting 55 cents a share, and now you're getting $4.40. So their recent earnings, they beat on earnings, but they lowered their guidance, just maintaining that cautiously optimistic stance. You know, we know they're exposed, they're retail for a lot of apparel companies, they source overseas, but I'll tell you I've got an 11-year-old um that plays all sports, and if you've ever been to one of the House of Sports mega stores, they're like 150,000 square feet, rock walls, golf simulators, batting cages. It's like a dream if you like sports. So um kids will continue to play, there will be sports leagues regardless, and uh these items typically are something you buy in store. So you know, it's uh we we think that when tariffs settle in, which they will eventually, there'll be a light at the end of the tunnel, there will be a company like Dick's that benefits.
It sounds like I've got my new weekend activity where I can just post up for a little bit. I hope they don't mind if I'm there for a few hours. Matt, you know, as you think about some of what we've heard in earnings calls and from CEOs over the course of this earnings season, a few of them have come out and it's actually more than a few, several of them have come out and essentially tried to guide through some of the uncertainty, but have had difficult really conveying to the street that they're comfortable reaffirming forecasts that they put forward at the start of the year. How should investors be evaluating when they hear comments like that from some of the top brass at companies who are trying to best model for what their business will need to do in order to outlast some of the interim uncertainty?
Yeah, you know what? It's I mean you said it, it's it's difficult. It's these it's uncertain times and um clearly Trump stance is unpredictable, that's driving everything. So we're just really saying don't react. Um expect continued volatility in the short term, but as an investor, when we're talking to clients, you've got to stay nimble. Um you reassess your risk tolerances right now because a lot of people are starting to realize that, and just don't chase these rallies without true confirmation. Um you know, this is this is very difficult to do, maybe now more than ever, but as an investor, you have to tune out the noise. Um and you have to maintain a certain level of just we say realistic optimism, um not blind optimism, but just be realistic and uh take into account whether you're an investor or you're a trader. I mean entry points exist for investors regardless, and like I said, there will be a light at the end of the tunnel with regard to tariffs, but just no one knows when or how.
