December 1, 2020 – Post-Election Day Edition

Finally, the election day is behind us. One less distraction from our focus on improving business conditions, stock markets and economic outlook. We are optimistic looking forward for many reasons and you may have heard these observations before. For people who are looking at the stock market and investing and economics for more than just a few weeks or months down the road, the picture is quite bright.

Again, recent events have reinforced our long-standing approach to investing. Specifically trying to time the market and trying to get in and get out based on political reasons or the possibility of predicting some sort market impact from almost any reason in the short run has little chance of success. We urge investors to pay attention to the economic fundamentals and minimize the influence of politics, fear and headlines in the investing process. It is extremely difficult to not get influenced in the short term, but our role is to make sure we are seeing the bigger picture economically, understanding the short term noise and how it will or won’t directly impact your portfolio. Time horizon for your investments will consistently be at the top of the list of items we review when connecting with you. We have example after example of well-constructed portfolio’s ability to weather short term volatility when given the opportunity.

The reasons we are optimistic moving forward in the coming several years include:

  • We currently have exceptionally low interest rates historically speaking. We are not expecting interest rates to rise materially in the next few years. This is one reason we are in the middle of a very-under-reported housing boom
  • We have low oil and energy prices. There is a dramatic move underway towards electric vehicles and clean energy. This will continue. It will also reduce demand for gasoline and open new investment opportunities. Low prices for heating oil, jet fuel, diesel fuel, propane, plastics, and chemicals will keep money in the pockets of consumers and small business while keeping a lid on inflation
  • Tax increases are not likely to get through Congress any time soon.
  • The stock market continues as a forward-looking indicator and we are anticipating improvement in corporate profits and business conditions 9-12 months ahead.
  • Vaccines are on their way – The cavalry is coming! Life and business activity will begin to normalize as we move into early-mid next year and more people will travel and dine, and more businesses will open or re-open.
  • We are in the middle of a technology boom across most industries in a myriad of ways.
  • We’ve had a great rebound in the stock market and in economic growth (GDP) and with strong re-employment since the low point of March/April of this year. This has surprised many…but not a surprise to us. We have been calling it this way all year. There’s no reason to think this does not continue.

As usual we are upbeat and optimistic about the under-appreciated depth, strength and resiliency of forward-looking abilities of American businesses, industry and entrepreneurship operating within our free-market system of capitalism. We have had numerous temporary problems but few have ever benefited from betting against the American economy over the long run.

We sincerely hope everyone is able to have a healthy, safe, and enjoyable Holiday Season!

Warmest Regards,

Brian Cassidy, Arnie Magid and Dan Kelly

As usual this commentary is based solely the opinions of Brian Cassidy, Arnie Magid and Daniel Kelly. Nothing in the above written material is endorsed by, or written by, or provided by Cambridge Investment Research, Inc., or by any other outside party or firm.

Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. 

Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. 

Cassidy Financial Services, LLC. and Cambridge are not affiliated.