Anxious Times for Americans

We are living in anxious times.

Be grateful for your life and the opportunities you have in life. Keep in mind you can only control your own decisions and not much of what else is going on around us.

A virus set loose by China on Americans and the world coupled with a strongly politically divided country in a presidential election year has created more anxiety than in most years.

We’ve seen the Coronavirus provide a death punch to thousands of people (mostly elderly and previously ill) and governors in some states shutting down and destroying thousands of businesses and the livelihood of their owners and employees. Meanwhile, violent protestors and rioters have caused an estimated $2 billion in damage to cities. All in all, more turmoil than usual any way you measure it.

My Take:

• Sit tight. The stock market may have some ugly days (this is nothing new) with the uncertainty about Covid, the Election, Supreme Court, etc.. These will all pass. In the end, stock prices are about earnings and discount rates (low-interest rates are good). For the foreseeable future, profits are set to rise for many companies and interest rates will stay low.
• I don’t think many big cities including NYC, Chicago, and LA will ever be the same.
  • Lack of desire to visit or live in these and other big cities there because of serious safety concerns
  • Entertainment related business shutdowns (hundreds of restaurants and other venues out of business)
  • Convention related business done now will never be the same – imagine the impact from this on hotels, restaurants, airlines, etc.
  • Rioters destroying businesses that will never come back
  • Working from home got a massive steroid shot. The growth in acceptance/preference of doing a computer screen share meeting was amazing and will lead businesses to cut their office space needs dramatically
  • The cost-saving for employers allowing employees to work remotely. The commute time savings from working remotely for employees will change forever for many people.
  • Many large poorly run cities are financially broke and already have high tax rates and may raise taxes and fees even more as a desperate move to pay their obligations.
  • Current residents are fleeing these big cities in response to all the chaos.
• It’s true, we’ve never lived through anything like this, but the country has been through all kinds of massive change in its history.
  • World wars
  • Scary Cold Wars
  • Many Presidential Elections and Supreme Court Appointments
  • 9/11
  • Great Recession
  • Dot.com stock meltdown

As the chart link below shows, the US stock market (a blend of large American companies) has survived and thrived through many bad events and anxious times.

Click Link Dow Jones – DJIA – 100 Year Historical Chart

EVERY TIME IN HISTORY THE STOCK MARKET HAS TAKEN A SIGNIFICANT HIT, NOT ONLY SHOULD YOU HAVE NOT PANICKED OUT, IT PRESENTED A BUYING OPPORTUNITY.

This time will be no different should the stock market give back some of its historic gains from the past several years.

5 POWERFUL REASONS TO INVEST IN ETF’S

In summary, we are a divided nation. I’m not sure what the bigger division is right now; fear or little fear of Covid19 or conservative vs. liberal political views. In large part, I think that’s based on what you watch on TV and/or social media.

Some good news:

A new 9/10/20 CDC Paper says the Infection Fatality Rate (IFR) by age group is:

0-19 years: 0.003%

20-49 years: 0.02%

50-69 years: 0.5%

70+ years: 5.4%

The CDC estimates that actual infections are 11 times the positive test rate.

Click link – COVID-19 Pandemic Planning Scenarios

During this business shutdown, we’ve seen the companies that have benefitted from Covid19 fear and lockdowns have done the best. Eventually, the shutdowns and fear will pass and the surviving businesses will come back as other parts of the economy pick up again. Obviously, the election will also pass, although I expect it to be contested. I wouldn’t be surprised if there were more riots, looting, and business destruction given that excuse to get out in full force.  This could get very ugly, but the economy and many businesses will prosper.

Hang on for a potentially rocky ride.

In light of all this, I would love to take this opportunity to review your financial plan and portfolio with you.

Please click on this link to schedule a call or in-person meeting.

For information on my financial planning and investment management firm visit Fortune Financial Group, Inc.