You won’t find many people who disagree with the statement that life is unpredictable. But the past year we experienced was certainly not for the faint of heart. As we adapted to new ways of working and living, uncertainty became the norm. So, it’s not surprising that many of us entered 2021 with a bit of cautious optimism of what might be around the corner.
Although we didn’t know what to expect, we’re now halfway through the year and hopefully moving back to some sort of normal routine. The 2021 midpoint is the perfect time to take stock of what’s happened so far in 2021 as we continue recovering—emotionally and economically—from the pandemic.
Market Performance(through July 2, 2021)
As vaccine rollouts have allowed many businesses to return to normal, it was widely believed that increased economic output would be the result. Stock market performance has been mildly volatile in the first half of this year showing an overall upward trend. The S&P 500 and Nasdaq indices continued setting record highs through the end of Q2 2021 and equity market participants have been rewarded.
As we finish out the second half of the year it will be important to monitor potential headwinds such as continued labor supply shortages, ongoing supply chain constraints and the spread of the Delta variant of COVID-19. These headwinds might have an impact on the economic recovery that we are currently witnessing.
A Shaky Return To Normal Employment Levels
It has been generally expected that as businesses reopen to full capacity, the number of unemployment claims and unemployment rate would return to normal. As many of us have seen in the news, however, this is currently not the case. Along with other businesses in the hospitality industry, restaurants are especially struggling to replace their workers and remain understaffed in the face of increasing demand from consumers. Whatever the reason for the worker shortage, getting workers back into the workforce remains a key component of the U.S. recovery plan.
Interest Rates & The Federal Reserve
The Federal Reserve has continued to keep Interest rates low since the onset of the pandemic. In addition, they continue to purchase $120 billion in bonds (treasuries and mortgage-backed securities) each month to provide additional support to the economy. They have stated they will likely not raise rates again until 2023, when it is more likely that inflation rates will reach desired targets. However, the current bond purchases will need to be reduced (tapering) as a first step towards a more normalization of monetary policy.
How Should You Respond?
We’ve always said that market performance is impossible to predict with accuracy. As 2020 and 2021 have taught us, market performance may be impossible to predict at all. The truth is, we never know what lies ahead, but that shouldn’t prevent us from taking the steps to protect ourselves and pursue financial freedom.
Now more than ever, it’s important to know you’re making the financial decisions that are moving you toward your goals. At Fiduciary Wealth Management, we specialize in helping our clients reach financial independence using sound financial strategies that align your day-to-day decisions with your long-term financial plan. If you’d like to see how we can help you, schedule a phone call now!
About Rocklin Senavinin, CFP®
With over 20 years of experience in the financial planning industry, Roc has dedicated his career to helping individuals live comfortably in retirement and enjoy the assets they have spent their career building. He is co-founder of Fiduciary Wealth Management, a fee-only registered investment advisory firm in Little Rock, Arkansas. As a CERTIFIED FINANCIAL PLANNER™ professional, he has advanced training in the holistic process of creating a personal financial plan that addresses a person’s comprehensive needs for the short and long term. To learn more, connect with Roc on LinkedIn or visit www.fidwm.com. If you have questions, feel free to schedule a phone call using this link.
The views expressed represent the opinions of Fiduciary Wealth Management, LLC and are subject to change. These views are not intended as a forecast, a guarantee of future results, investment recommendation, or an offer to buy or sell any securities. The information provided is of a general nature and should not be construed as investment advice or to provide any investment, tax, financial, or legal advice or service to any person.
Additional information about Fiduciary Wealth Management, LLC is also available on the SEC’s website at https://www.adviserinfo.sec.gov/Firm/284324. Please call or email with questions.