Looking Across or into a Chasm?

Stock markets around the world reacted to the great news of the successful development of Covid-19 vaccines by anticipating a return to normal. However, initial optimism was soon tempered by the reality that the economic recovery from the Spring shutdown is slowing. The strong initial fiscal support is wearing off. Some areas are initiating additional restrictions on commerce and public activity. Everybody knows that vaccines are coming. However, it will be six months or more before enough people are vaccinated to impact the pandemic. Then it may take even longer before enough public confidence returns to begin to drive the economy forward.

Without additional governmental support on the horizon, it is a fair question as how much more our economy could be damaged in the meantime. The Bull wrote that in an election year, additional stimulus was highly likely. Unfortunately, that did not prove correct. The question for investors now is, do you look across a potentially difficult period or react to the reality that the next few months could be ugly? Our inclination is to sit tight because reacting to near-term events rarely works out well. The end of this pandemic is in sight and investors ought to prepare for that eventuality. Stay steady my friends.

The Lonely Bull