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Covid-19 Economic and Market Update

Happy Friday everyone, it was a productive week for big pharma. They have a vaccine that is phase 3. It should be available to about 20 million people by the end of this year 2020, and then available globally sometime mid-late 2021. The vaccine will require two shots at different intervals.


Economy

There are concerns about a double dip recession due to more lockdowns and winter job losses. There are also major concerns about the rising cases of Covid cases and hospital capacity. Per PwC, 53% of CEOs surveyed believe that global economic growth will slow over the next 12 months. Important to know, just because the economy may be in a recession does not mean that the stock market will go down. In fact, some of the best historical returns have come during recessions. That why it's important to not stress too much about the short term market gyrations.


Investment Trends

This week the market was led by stay at home stocks and EV car producers. There still are tremendous growth opportunities as we approach a new world post COVID. . This happened right after spiking covid cases and some major school districts went back to remote only. On a global basis, I've been overweight China all year and it's paid off well. I like how they handled the COVID pandemic and they simply have a larger middle class than the United States. They have the benefit of also having a younger population. In addition, many United States Companies are now entering China, including industrial giant Caterpillar.


So what should you do?

Nothing dramatic, but continue to watch your spending on non-essential items. Right now is the time to keep beefing up your emergency fund. If you have over 3 months of your essential expenses in savings, we can talk about investing the amount above that in a non-retirement brokerage account to grow your money. Robinhood, Charles Schwab, and Fidelity are great firms that allow fractional trading. That means you can put $500 into say Amazon, instead of having to pay over $3,000 per share right now. This is great because it provides more people with the ability to gain exposure to highly profitable companies.


Have a great weekend everyone, and be safe and wear your mask!



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