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Investment & Economic Strategy Update — February 18, 2021

Well, we are firmly into 2021 and our firm ultimately sees a very good GDP growth for the US in 2021 & 2022. The lack of spending by consumers in 2020 from lockdowns, combined with the money received from the stimulus payments has created a lot of pent-up demand for the US economy.

That means even though all of the new policies being put into place by our new president man not be beneficial, the investing and economic policies should allow the US to do very well, especially over the next 3-5 years due to continued expansion. We could even have a bull market for the next 10 years very easily, even with the normal intra-year volatility.

As far as the bond market is concerned… Bonds can be just as risky as the equity market. Just look at the 20-year Treasury. It’s down about 7% (negative) year-to-date while the equity market is up 4% (positive).

The US unemployment numbers will continue to gradually fall over the next few years and we see the US doing very well, especially compared to other world economies like developed Europe.

Some emerging markets such as Asia should be on-par or slightly better than the US for GDP over the next year or so but we are not currently invested in those markets until further research is done.

Remember: Market volatility is normal. There is a possibility for a market pull-back sometime this year, just like every year. It could be 3%, it could be 10%… The important thing to remember is that this is completely normal and to not get emotional and make panicked decisions!

As always, if you have questions or concerns about your portfolio, give us a call. (800) 618-8577.


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