Why is the market going up?
The markets are rallying back from the fear of Covid-19 and some things have changed dramatically. But many things have not.
Let’s take a look at what has changed and what has not.
Things that changed
Right now, the Covid-19 economic crisis is still upon us. Many companies are attempting to restart their businesses and some of them report that they cannot find workers—again. This is both a huge change, and a constant change. We held out hope, here in the Periscope, for a quick recovery and there are optimistic signs it still might happen.
Right now, the Covid-19 health crisis is worsening in some parts of the world and improving in many other parts of the world. Vaccines and therapeutics, public and private partnerships are all working at a feverish pitch to change the direction of the pandemic.
Right now, many Americans who are able are working from home. This change is likely to persist. Business opportunities abound for the creative high-tech companies who are able to adapt. We’ll see new services, new products and new technology that will change the way we interact, travel, eat and more in the coming years.
Things that did not change
Right now, US equities have come roaring back from the doldrums of March 23. In broad terms, the SP500 is approximately where it was a few months prior to its all-time high, on February 19. With previous health crises, the equity markets often rallied back quickly, as we discussed in prior Periscope newsletters.
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- Life Is Unfayeh: Today's Equity Markets
- Three Ideas To Keep Coronavirus in Perspective
Another thing that has not changed: human emotion. We are conditioned to over-react. We will either flee or fight. Human emotion will drive our behavior and that will drive us to need someone we can trust.
And the biggest, unstated issue of the day: money. Money is at the heart of every changing, stressful topic we are speaking about. Whether it is the police force, the health response or the economic response to Covid-19, money is at the heart of it.
Accumulating money is hard. In today’s world, it’s just as hard to keep it. Find someone you trust and have the heart-to-heart conversations about the issues that mean the most to you, and to them. And, as you do so, consider the advice your financial advisor gives you during these crises. I hope you find it true, and in alignment with your values, goals and relationships.
I hope you found an unchanging voice of reason during these dramatic times of change. That is our goal, at A&I, to be the one person who places your interests above everything else. No one but your family has a stronger interest in your financial success.
For more about the reasons for the market’s recent rise, read the commentary from Litman Gregory on Why Is the Market Going Up When Economic News Looks Grim ,(1) and Why Is the Market Still Going Up When COVID-19 Risks Remain. (2)