I couldn’t help myself, reading the news this week the old rock-n-roll song from 1989 came to mind. Politicians are debating, arguing, pontificating about what should happen in the economy. Of course, much of it is being spun in their party’s favor which does the country no good.

So, what are the facts? Well, they haven’t changed much. The stock market has made a great rebound, the bond market is stable. In both cases, volatility is way down, and the government’s money is working its way through the economy. This is all great news, but we still have a Global Pandemic, 35 plus million unemployed, and most likely no vaccine until 2021, which will help solve both of these problems. Of course, there could be a breakthrough because a lot of brilliant people are working on this problem. We believe that it is best to settle into this new normal and live life now.

So how do we manage investments? First, let’s recognize where we are economically. This is a chart from the Congressional Budget Office, a non-partisan US government department:

They are predicting a “Nike Swoosh” recovery. As the 2nd quarter data rolls in it is clear that we are in the worst recession since the Great Depression. Second, let’s not guess about investments. Currently, the stock market is trying to front-run this recovery and guess who the winners will be. This may be fine for a trader willing to take that speculative risk. But we don’t recommend this for most clients. By measuring data, we know what asset classes are trending positive; US Treasury Bonds, the US Dollar, Gold, and Crypto-currencies. And our models are holding 2 out of 4 of these. Third, we look to the future. When credit spreads signal that the stock market is recovering, we will look to invest in US large-cap dividend growth and US small-cap companies to lead the turnaround. We are building those portfolios now to be prepared.

This Pandemic has caused many of us to ask why, why God? Remember this verse, “Just as you cannot understand the path of the wind or the mystery of a tiny baby growing in its mother’s womb, so you cannot understand the activity of God, who does all things. Plant your seed in the morning and keep busy all afternoon, for you don’t know if profit will come from one activity or another—or maybe both. Light is sweet; how pleasant to see a new day dawning.” Ecc. 11: 5-7

Investment Advisory Services offered through Sound Financial Strategies Group, LLC (SFSG), a Registered Investment Adviser. Certain representatives of SFSG are also Registered Representatives offering securities through APW Capital, Inc., Member FINRA/SIPC, 100 Enterprise Drive, Suite 504, Rockaway, NJ 07866 (800)637-3211. SFSG and APW Capital are separate and unrelated companies.
The opinions expressed are those of Sound Financial Strategies Group, LLC (“Sound”). The opinions referenced are as of the date of publication and are subject to change without notice. This information is not a recommendation to buy or sell a particular security or to invest in any particular sector. Forward-looking statements are not guaranteed. Sound reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs, and there is no guarantee that its assessment of investments will be accurate. This information is not intended to be investment advice and does not take into account specific client investment objectives. Before investing, an investor should consider his or her investment goals and risk comfort levels and consult with his or her investment adviser and tax professional.
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