Bob's Blasts

November, 2020

 

Election/Market Outlook

For anyone who was at our client appreciation event in 2017, you had the opportunity to hear a positive market outlook from Dr. Claus te Wildt of Fidelity.  At that time, there was much uncertainty as we were in the first year of a new presidency and multiple major hurricanes had just destroyed a large portion of the Caribbean islands, Texas and the southeast.   This week, we had an opportunity to listen to Claus discuss his outlook for the election and economy moving forward.  Below are a few key points from his dialogue and reasons Fidelity is still optimistic.

  • COViD 19 vaccine could be available in Q1 or Q2 of 2021 for healthcare workers and at-risk individuals.  Available to everyone later in the year. Once a vaccine is available to everyone, life should return to a more normal state.  
  • The election is not as important to the economy as everyone is making it out to be.  Each candidate has positive and negative attributes but they tend to offset each other.  Either will be inheriting a good economic situation. 
  • A reelection of Trump would be positive for taxes and regulation but negative for trade and future stimulus. 
  • A win by Biden with a republican Senate would make raising taxes and increased regulation difficult. 
  • A blue sweep may be negative for taxes but positive for trade and additional stimulus. Even under this scenario, it may take time to raise taxes as the economy is not strong enough to withstand an increase next year.   
  • Fidelity expects further stimulus in any election result; however, the amount of stimulus would be dependent on who wins.  Further fiscal stimulus would be positive for economic growth and markets.   
  • Federal Reserve interest rate projections signal they are planning to keep interest rates low for the foreseeable future.      
  • Impact of increased US debt?  It doesn’t matter until it does.  Fidelity doesn’t expect it to matter anytime in the next few years but could be an issue further down the road. 

 

How to maintain a positive attitude with so much negativity in the world

After the Fidelity presentation, we listened to a much different speaker talk about how to be positive when everything seems so negative.  A couple of pieces of advice from Kevin Elko when you feel down. 

  • Be a good friend to yourself. Don’t beat yourself up about things that are behind you or you can’t control.  Learn to encourage yourself and have faith in you. We tell others to keep their head up and it will get better, but we never tell ourselves the same.    
  • Decide to be happy and enjoy your life.  Happiness is a choice you make every day.   
  • Take ownership of your decisions.  Don’t waste time dwelling on the past and what could have been.   Tell yourself “So what, now what.”  
  • Connect with people.  Don’t let being apart from others keep you from connecting in some way.  Pick up the phone, jump on a zoom call or do something to stay connected with people.  

 

Moving forward

With the election only a few days away, market volatility has picked up and may continue.  Markets could end up having a negative or positive short-term reaction to the election results, but it’s really just a guess at this point.  After the 2016 election, half of the country was happy and the other half was upset but life went on and markets continued to function.  We expect the same to happen after this election, it just sometimes takes time.

As always, preserve the funds needed over the next few years and maintain an allocation that instills confidence in your investments.  Focus on what you can control and have the mindset that today will be a good day. 

 

 

This material is meant for general illustration and/or informational purposes only.  Views expressed in this newsletter may not reflect the views of Royal Alliance Associates, Inc.  It is our goal to help investors by identifying changing market conditions.  However, investors should be aware that no financial advisor can accurately predict all of the changes that may occur in the market.   This material should not be relied upon as investment advice.  Investors should note that there are risks inherent in all investments, such as fluctuations in investment principal.  Past performance is no guarantee of future results.  There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio in any given market environment. This article contains forward looking statements and projections.  Neither Royal Alliance Associates, Inc nor its representatives provide tax or legal advice.