The markets were back up last week, setting yet another all-time high. Jobless claims remain low and it is expected that things will improve further with children returning to in-person school this fall.
The “yet another all-time high” for the market causes many people to question if this can continue. I don’t have a crystal ball, but I can tell you two things with great certainty. First, there will always be another all-time high. I don’t know when, but it will happen. It happened after the Great Depression, after the oil embargo and stagflation, after the dot-com crash, and after the Great Recession. Second, the market will go down. Your accounts will decline in value. Both of these things are certain. What’s not certain is the timing.
The other part to this is the growth of the economy. Many people I talk with are amazed at the continued growth we are seeing. I liked to relate it to a story a friend shared about sailing across the Pacific. She had taken tea up to her husband, who was on duty. There was nothing as far as the eye could see, just the moon and stars and seemingly endless water. They were sailing along and suddenly came to a complete stop. In the middle of the Pacific Ocean. With nothing around. And then, they rolled slightly backwards, the sails filled, and they took off at the same speed as before.
That’s what happened with the economy. The US was humming along, our economy growing at the fastest rate since 9/11, and we stopped. March of 2020 stopped everything. We went backwards – the markets dropped about 30% -- and then we went full speed ahead. My point is that we haven’t done something new with Covid, although certain segments of the economy have benefited and grown as a result. Overall, we’re just sailing along like we were before.
As for my friend? Some research assistants at the next island they stopped at said they probably ran into a sleeping whale.
Your action to take this week is to make a meal plan for the week. Then make a grocery list, and head to the store with your list, when you’re not hungry. You can also register for our educational events on our website at covingtonalsina.com. Be sure to check out our Facebook page for more information.
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All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
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