We expect stocks to be volatile over the next 12 months as vaccine news develops — optimism over vaccine announcement buoys it, and pessimism about vaccine efficacy drags it. That will be uncomfortable, but in general, we expect stocks to be higher a year from now. By then, we’ll likely have taken tangible steps to recover from the pandemic, the economy will start to recover slowly, and earnings will rise as a result.
We’re starting to scale cash reserves back into stocks, and we’ll continue to do this through December and January. The only caveat is that if a client needs money for a house reconstruction or a big purchase of some kind, we’re keeping that in cash, not putting it in stocks.
But good news for the stock market is not good news for average Americans. There are still 10 million fewer Americans working today than in January of this year. The U.S. response to the pandemic is the still worst in the world. Daily mortality is up 75% over the last month to 2,000/day, and it will continue to soar through Thanksgiving, into Christmas, because the infection rate is triple what it was back in June.
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