What's Next for the Markets?
The 3rd quarter saw the Markets make up for losses from March and grew 9.2%. While this was a slower rate than the 2nd quarter growth rate of 22%, the Markets are back in positive territory for 2020. The Markets did show signs of cooling towards the end of September as it took a pause amid the uncertainty of the Covid-19 crisis, the economy and stimulus package legislation.
The impressive result can be a bit deceptive as a majority of the growth & cooling off can be attributed to large technology companies such as Amazon, Google, Apple, & Tesla. A majority of American small business are still struggling to get by during this crisis.
Can the Markets continue to improve? There are a number of potential headwinds in the 4th quarter of 2020 that can pose a challenge to continued growth: economic impact of the Covid-19 crisis, the upcoming Presidential election, passage (or not) of a second stimulus package, and the Supreme Court vacancy.
What can we do? Control what we can control: Maintain a balanced and long-term approach to investing, have emergency cash reserves in place, & watch our spending. Most of all, remain calm, breathe, and stay healthy.