We now have many of the “talking heads” on TV speaking about inflation fears, market sell-offs, gasoline shortages, China amassing ships near Taiwan, Russian troops along the border of Eastern Ukraine, and Israel and Hamas trading rockets on the Gaza Strip.
And we’re about to approve another 1-4 trillion dollars in “infrastructure” and other spending bills, fueling inflationary fears.
There are 7 million unfulfilled job openings as employers complain that the Government is disincentivizing Americans not to return to work until unemployment and Covid payments come to an end.
There has been a bit of sell-off in the Technology Sector this year — the #1 growth sector in the U.S. and an engine for innovation — and industrial production appears to be taking a breather.
All bad news!
So, should you be scared?
The answer is no.
What should I expect in the near future?
The financial indexes are taking a well-needed breather.
We expect to have two approximate 10% pullbacks in 2021 as we adjust to a post-Covid environment, and as interest rates on the 10-year Treasury Note increase, lowering the value of most bonds and bond funds. Fixed income is definitely a challenge for 2021.
We also expect the end of 2021 to be better than the beginning of the year when it comes to equities.
Of course, there will be winners and losers, ups and downs, elation and disappointment. But we believe that these pullbacks represent buying opportunities and never recommend selling into a corrective market.