Page 3 - Means Wealth 2020/2021 Perspectives
P. 3

December, 2020


           he American people have endured many major challenges this year, most
        T notably the pandemic. While it is easy to see the hardships we have all
        faced this year, there are also many positives that have come out of this time
        of crisis.  For many, it has been the additional time home with their family; for
        others it has been finding new ways to connect with people; and for some it
        has been a time to just slow down. Then there are other positives such as a
        reduction in overall crime, fewer road accidents and a substantial reduction
        in atmospheric pollution due to the reduction in global travel. In addition,
        community involvement is on the upswing as volunteers help the elderly and
        those less fortunate. But we owe our deepest gratitude and appreciation to
        the essential workers who have played key roles in keeping our communities
        and healthcare systems operating. As I write this there is renewed optimism
        that a safe and effective COVID-19 vaccine will soon be a reality. Until then,
        Americans are strong and resilient people and we will continue to find
        innovative ways to get through this.
        As we approach 2021, what can investors expect from the stock market?
        From the Dow Jones closing low of 18,592 on March 23, 2020, that index
        recovered quickly and hit 29,100 on September 2, 2020—a 56.5% jump.
        This was the shortest bear market in history. Why would the stock market be
        doing this well given the pandemic crisis and the economic climate? The
        market is forward-looking. It does not focus on what is happening now, but
        rather on what could be. In that vein, market indicators are pointing green.
        The Federal Government has continued to increase the money supply
        due to the COVID-19 stimulus efforts. These trillions of dollars provide an
        extraordinary boost to liquidity. This liquidity could be revealed in economic
        activity once a proven vaccine is discovered and the pandemic fears fade.
        Corporate earnings could be rejuvenated as many have trimmed their
        workforces and cut unnecessary expenses. Yields on cash and bonds are
        minimal, making equities, the more risk-on investment, attractive.

        I am writing this introduction shortly after Joe Biden surpassed the magic
        270 electoral votes to become the 46th President of the United States. At
        this juncture, it appears there will be a continued divided Congress, as the
        Republicans will most likely retain control of the Senate. This gridlock will
        provide checks and balances and should be positive for the market as likely
        no radical changes will take place. More stimulus will be forthcoming as well
        as a sizable infrastructure package.

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