If Jerome Powell Is Worried, Should You Be Worried, Too?
The short answer is no, but this is an important time to pay attention and possibly recalibrate for your family’s financial future. In his remarks on November 12th at a European Central Bank panel discussion, Federal Reserve Chairman Jerome Powell had this to say, “We’re not going back to the same economy,” Powell said. “We’re recovering, but to a different economy and it will be one that is more leveraged to technology, and I worry that it’s going to make it even more difficult than it was for many workers.”
Powell was referencing the post-pandemic economy and how it is likely to be different in some fundamental ways. While no one can predict the future, Powell also had this to say, “So, I think you’ll see more telework, you’ll see probably the acceleration of automation. All of that was in the process of happening, but you’re going to see much more of it.”
With recent good news regarding a COVID-19 vaccine, there is reason to be hopeful that 2021 could bring more solid steps on the road to economic recovery. Predictions are that it will be slow and will follow a difficult winter that already includes many more cases of the virus. Simultaneously, it appears that we will see a new administration in the White House. That, too, is worth a savvy investor’s attention, but perhaps not for the reasons you may guess.
In her Forbes article before the election, Senior Contributor Kristin McKenna pointed out that U.S. stocks and bonds tend to perform better in an election year compared with the year after; however, she also noted that the stock market has gone up and down under Republican and Democratic presidents, though the trajectory has been positive from Roosevelt through Trump. Her points were well worth keeping in mind: Put your personal feelings about politics aside and focus on what you can control, like how diversified your portfolio is considering the threat of volatility.
There is little doubt that politics and the pandemic will continue to have an impact on our lives and livelihoods. Our encouragement is to focus first and foremost on your family’s health and safety, as well as your own. And rather than worry, let’s work together to understand the “different economy” that Fed Chairman Powell spoke of and adjust your plan for the future.
This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. If professional advice is needed, the services of a professional advisor should be sought.