2020 will be a historic year for generations to come. A Presidential election amidst a deeply divided country is overshadowed by the coronavirus pandemic. The pandemic has forced millions into unemployment in the United States and continues to cripple major sectors of the economy. Fiduciary wealth management expert Dustin Stanley of Strategic Wealth Designers joined WDRB in the Morning to talk about how this all has burdened the stock market and viewers finances. The stock market was on it’s own historic 10-year bull run prior to the pandemic hitting. Unemployment has tamped down the markets long-running surge but stocks have picked back up in the last month.
“It has a lot to do with optimism, if we look at the unemployment numbers in May, we were at 13.3%, in June it’s gone down to 11.1%, so we’re heading in the right direction,” Stanley says. “ The other thing to look at is the ‘Big 4’, you’ve got Microsoft, Amazon, Google, Apple -- those four stocks make up about 20% of the NASDAQ so when people see their Apple stock go up, they believe things are headed in the right direction.”
The Presidential election remains toward the back of the headlines as former Vice President Joe Biden has done little on the campaign trail and President Trump also has only held just a few rallies during the pandemic. With the election just months away, investors are eyeing closely what policies are being discussed among both parties and who may be gaining the upper hand to win the Presidency.
“The market likes predictability, it likes to know what is going to happen, if history is an indicator for what we see in November and beyond, if an incumbent were to stay in office, the market will rally about 10.5%,” Stanley says. “However, when an incumbent loses, what we’ve seen the following year is typically a one to three percent loss.”
COVID-19 cases are soaring in some states while others remain flat. Some sectors of the stock market have largely ignored the coronavirus or benefitted from things being shut down. Stanley says regardless of the case numbers you don’t want to pull your money out of the stock market completely but you may want to make some adjustments in your investment portfolio depending on where you are in life. “It absolutely should not keep you out of the market, but if you’re in retirement or within five to ten years of retirement, you should have really strong safety nets in place for your portfolio,” Stanley says. “If your ten, twenty, thirty years out from retirement, this could be a really great time for you to increase your 401K contributions or Thrift Savings Plan contributions at your employer, or if you are not start one on your own, take advantage when the market drops, where you are buying when the market is on sale.”
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