Lordstown Motors Disappoints Investors

By John Stewart, chief investment officer at Farmers Trust Co.
YOUNGSTOWN, Ohio — Lordstown Motors and the future of their electric trucks have been a source of optimism for the Mahoning Valley ever since the upstart company filled the void left by GM several years ago.

Unfortunately, the company’s stock has taken it on the chin over the past couple of months and took another leg down on the corporate earnings call earlier this week. The firm reported that vehicle deliveries for 2021 will come in below expectations (by about half), costs will be higher than expected, and the company will need to raise additional capital – although it is not clear whether they intend to raise it through debt or equity.

Despite the cocktail of bad news, shares finished more than 13% above their intraday lows on the day following the report and added another 5.5% a day later.

Perhaps investors can now look to the future as the company focuses on moving things in a more positive direction going forward. Let’s hope so, for the Valley’s sake!

Featured Insight: The Target Date Solution

Target date funds have become a staple of retirement plan investing. In fact, roughly 82 cents of every 401(k) contribution dollar is going into these vehicles.

Target date funds essentially create a tailored investment portfolio around your target retirement date, so if you’re young and have a long investment horizon, they have a riskier portfolio that will allow for more volatility in search of higher longer-term returns. If you’re retiring next year, they will lean in a more conservative direction to focus on preserving your accumulated wealth.

What’s great about these investment options is that you truly can “set it and forget it” because they provide all the diversification you need while rebalancing the portfolio regularly and systematically reducing your risk profile as you move toward retirement.

I highly recommend using target date funds for investors who want minimal involvement in their investment decision making – just focus on regular, disciplined saving and let the fund do the work for you.

Looking Ahead: Infrastructure Battle Continues

With second quarter earnings season wrapping up and this weekend being the unofficial start of summer, there is likely to be a bit of vacuum in the financial news cycle. What better to replace it than with more back and forth bickering in Washington, D.C.?

While lawmakers will continue to quibble over its size and scope, we are likely to see some type of infrastructure package come together over the next couple of months.

Investing based on this knowledge is another matter. It seems there is always a story on Wall Street about the companies that will benefit from infrastructure spending.

Copyright 2022 The Business Journal, Youngstown, Ohio.