Financial Strategies

Economic outlook has hopeful signs

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We have endured COVID-19 for a full year already. Many anxiously wait for the vaccine and the ability to visit friends and family, eat out and travel again. Unfortunately, turning the page on the calendar to a new year didn’t make all of our economic problems go away. But many appear to be improving.

The slow rollout on the vaccine brought a pause to the expected reopening of the economy. However, the anticipation is buoying our hopes and keeping the economic outlook positive.

Bill Greiner, Mariner Wealth Advisors’ chief economist, recently stated his optimism in economic recovery in the second half of this year. He suggested that with the rollout of the stimulus package passed in December, along with successful vaccinations, that we could see some green shoots in economic growth as early as next quarter.

Greiner pointed out that Real Consumer Spending, residential investment and capital spending have all significantly improved.¹ This could position Gross Domestic Product (GDP) to be around 4.5% or higher if everything continues the upward moves. This is good news and actually very rare. We have to go back to the 1960s and 1970s to see anything close to a 5% GDP.

There could be a worst-case scenario as well, if COVID cases continue to rise, and the vaccine distribution drags on through most of the year. There could also be political headwinds and no additional stimulus. However, the Conference Board still predicts a positive GDP although potentially much lower. This outlook, even under a bad scenario, is important in order to avoid a double-dip recession.

Investors hoping to keep market volatility at bay will likely be in for continued instability for at least the first half of the year. Strong economic growth, an accommodative Federal Reserve policy and declining COVID cases should all point to good fundamentals for the stock market.

Jeff Krumpleman, Mariner Wealth Advisors’ chief investment strategist and head of equities, indicated that the recovery that started in 2020 was significant, in that the broad market participated across most asset classes. This is often an indication that the recovery is on solid ground. Although he says there can always be “bubbles and troubles,” the fundamentals are positive, including economic trends, earnings and low interest rates. Personal income and savings rates are high, and this can help people through a soft patch that is bound to occur at times.

The major concerns that have spilled over from last year include vaccine distribution, fiscal policy, political transition and unemployment.

This is a good time to revisit your portfolio and make sure you are well positioned for the recovery. Some investors may still be on the sidelines from the correction last March; some are waiting for another correction before fully investing again. Typically, this emotional timing of the market does not pan out well for long-term investors. The more time you are fully invested according to your risk tolerance and time frame, the more likely you are to meet your investment goals.

1.The Conference Board Leading Economic Index

Patricia Kummer has been a Certified Financial Planner professional and a fiduciary for over 35 years and is managing director for Mariner Wealth Advisors, an SEC Registered Investment Adviser. Please visit www.marinerwealthadvisors.com for more information or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov). Securities offered through MSEC, LLC, Member FINRA & SIPC, 5700 W. 112th Suite 500, Overland Park, KS 66211.

Patricia Kummer

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