December 2020 - The Global Pandemic & Government's Economic Stimulus Plan

Early in 2020, the Federal Reserve Board moved aggressively to lower the federal funds rate in response to the global pandemic and the anticipated adverse impact to the U.S. economy that was sure to follow. Soon thereafter, the federal government passed the CARES Act which provided an economic stimulus package designed to help individuals and small businesses alike contend with what amounted to be an economic shutdown. As we approach the end of this year, Congress seems to be coming together in agreement on a second stimulus package. Should this occur, as seems probable, the stock market will likely perceive this as positive. Considering the Federal Reserve’s stance with regard to keeping interest rates lower for longer, conditions look favorable for an equity weighted portfolio over fixed income. This, combined with the release of a COVID-19 vaccine (which will be the best stimulus we could ask for), should enable the economy to expand paving the way for the equity markets to continue their upward climb.

While policy matters, keep in mind decisions like this are not what truly drives the economy. Ultimately, it comes down to entrepreneurs who drive economic growth. We will innovate through this pandemic and emerge on the other side stronger and better prepared. In the meantime, stay the course and keep the faith. Work with a trusted financial advisor who cares about you and your family’s investment needs and goals; one who can help you put together a well-thought-out financial plan and build a well-diversified portfolio to meet the challenges that lie ahead on your financial journey. Please feel free to contact us if we may be of assistance.

Any opinions are those of J. Greg Garner and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Asset allocation and diversification do not guarantee a profit nor protect against a loss. Dividends are not guaranteed and must be authorized by the company’s board of directors.