You would think that with a $1.9 trillion spending package, an increasing rate of coronavirus vaccinations, and a potential $3 trillion infrastructure package waiting in the wings, the market would be at record highs. The fact it is not should tell you something about the indecision plaguing investors. When good news fails to impress, it usually means stocks (or at least some stocks) are headed lower. That should come as little surprise to readers. I advised investors to raise cash last month in preparation for what I see as a buying opportunity this month. The challenge: when do you put…
Insights & Advice
Tag: coronavirus
The coming economic boom
The nation should have a lot to celebrate in the coming months. Most economists are busily raising their forecasts for growth for the remainder of the year. If their forecasts are accurate, Americans can expect a booming economy this year and into 2022. The arguments for growth are straightforward. The number of Americans that are being vaccinated is now higher than the number of new coronavirus cases. By the end of May 2021, if government forecasts are correct, almost everyone in the U.S. that wants a vaccination should have one. As a result, we can expect to see a re-opening…
The Ides of March and the Market
It was a rough week in the markets. Investors were whipsawed throughout the week and finished down once again. I expect more of the same for investors this month. However, I don’t expect stocks to go straight down, find a bottom and then rebound. This downdraft is occurring at about the same time that markets sold off last year, but I do not expect the kind of severe correction we suffered through then. Overall, I am anticipating a 10-15% decline as I mentioned last week. Actually, as of Friday (March 5, 2021) morning, we have suffered a 6.3% decline from…
Supply chain chaos
Americans are used to purchasing products, either on credit or cash, and having them delivered within a week, at the latest. Repairing those products (such as appliances) may take a little longer but not by much. The pandemic has changed all that. Now, I am not talking about empty shelves instead of toilet paper. That was last year’s problem. No, it’s about things like accessories, parts, and even some large appliances. Take my nine-year-old refrigerator, for example. The water dispenser on the outside door doesn’t work. This has been going on for a year and the part needed to fix…
Investors reduce risk as stimulus talks fail
Hope springs eternal, but even the most strident bulls threw in the towel this week. American politics took precedence over the country’s economic well-being once again, as both political parties refused to compromise on a stimulus deal. But it wasn’t only politics that spooked investors. Across the Atlantic, investors watched as COVID-19 outbreaks escalated across Europe. Germany, Austria, the Czech Republic, and Italy reported new records in infections, while France announced a curfew in order to stem their own skyrocketing cases. In the U.K., Londoners are now banned from mixing with other households indoors. In this country, despite denials by…
The market’s window is getting smaller
This week the benchmark S&P 500 Index made a minor new high for the year. While that is cause to celebrate, the question to ask is how much further can we climb in the face of a slowing economy before suffering a meaningful pullback? During the last few months, investors have been warned by just about every economist worth their salt that the country needs another jolt of federal stimulus. This has not happened. You can cast blame on whomever you want for that failure, but none of that matters to the more than one million American workers who lost…
Listen to what I’m saying
Dalton — Time and again for these last few months, I’ve said to get reinvested if you got out of the market and to expect a big correction but to largely ignore it (or, if anything, use pullbacks to get reinvested). I have also pointed out that me expecting a “big” correction is rather optimistic, given that, as I detailed in the column “IRS lets you save on taxes,” in 12 out of 13 previous instances, after the stock market rallied following a waterfall decline, the stock market retested its lows. As readers know, a waterfall decline is a sharp drop…