April/May  2020 Economic Outlook

The market is fond of opening the country faster than many observers expected.  It may be, however, that the market has gotten a little ahead of itself.  It is possible there could be another down leg.  We may indeed discover we are in the middle of a sucker’s rally.  When we look back at 2000-02 equites declined 49% and took 60 months to get back to even, according to Capital Economics.  Looking more recently from the same source, at 2008-09 the market was off 57% and took 49 months to fully recover. 

Many observers are hoping for a V shaped recovery.  To our way of thinking, it’s better to hope for the best as we prepare for the worst.  Now is the time to determine how much loss investors find to be OK for them individually.  Then they can design their portfolios that may perform within their specific loss and gain parameters.  In the event things become a lot darker savvy investors may want to act as if a greater depression is in the cards.  Those who are better prepared will positioned to enjoy the upside by minimizing downside participation.  Retired investors may not have a lot of years to recover.

The Investor’s Advantage Risk-O-Meter reflects the company’s overall opinion on the economy and the stock market.  Leading indicators include the US Economic Outlook, Monetary Policy, Fiscal Policy, Leading Indexes, Global Economic Outlook, Corporate Profit Growth, Inflation, Equity Market Valuation, and Geopolitical Risk.

Do you know how much risk your portfolio and retirement accounts are taking? Understanding the risk of the economy and how it relates to your money is crucial. However, this means nothing if your investments aren’t designed around YOUR risk tolerance and YOUR financial goals. We’ve partnered with the fantastic folks at Riskalyze to offer a free tool that pinpoints your Risk Number so that you may informatively guide your portfolios asset allocation.

The information presented does not involve the rendering of personalized investment, financial, legal or tax advice.  This information is not an offer to buy or sell, or a solicitation.