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Weekly Market Review

Weekly Market Review

Good afternoon,

 

Finally, some honesty.

Jamie Dimon, Chairman and CEO of JP Morgan Chase, says that there’s no way to know what’s ahead for the US economy for the second half of 2020.

https://www.cnbc.com/2020/07/18/jamie-dimons-warning-for-the-us-economy.html

He’s right. We can make some assumptions, even some educated guesses, but none will, or should, have a high level of confidence.

Long story short, the future is uncertain, but no more uncertain than it always is.

 

And then right on schedule came the email invitations

“You are Invited! 2020 Midyear Outlook” with Dr. [insert fancy economist name here] from [insert big name investment/mutual fund/money manager company here.]

“What’s ahead for the markets” with [insert fancy talking head here] and they’ll discuss [insert rear view mirror performance here.]

“How to build a portfolio for uncertain markets” with [insert fancy money manager here] and why you should [insert their fancy investment process which is better than everyone else’s here.]

Long story short, each of those opinions is just about as good as all the others so don’t waste too much time reading/listening/watching them.

 

Quick follow up to last week’s message about coming up with a new mask, the smart people at MIT were already on it. Here is their version, https://www.cnbc.com/2020/07/21/mit-researchers-designed-reusable-n95-face-mask-for-healthcare-workers.html

Long story short, America is doing the math and working the problem. That’s what we do.

 

Would $4000 be enough incentive for you to take a vacation? There’s a proposal in Washington right now which would offer a tax credit of $4000 per person for travel as long as you travel more than 50 miles from home.

https://www.forbes.com/sites/jimwang/2020/06/23/another-travel-stimulus-proposal-would-you-take-a-4000-tax-credit-vacation-right-now/#799c69216977

Long story short, sign me up! On a personal level, a credit for a vacation would be appreciated.

 

On the other hand, the government has already spent more money than it has and just throwing more money at the economy isn’t how to make it grow. Then they’ll try to raise taxes to pay for it, which Winston Churchill once famously observed “I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

Long story short, Churchill was right.

 

The WMR tries to stay positive almost all the time, but we don’t ignore potential storms on the horizon. Here’s a voice from the other side. Peter Schiiff is a money manager who foresaw the housing bubble and great recession back in 2008-2009. He’s also unabashedly pro capitalism, which he argues, and the WMR agrees, is the greatest wealth creating force there ever was or is. Well, he’s got some warnings now about how the government and the public are handling things this time around. The unchecked spending and the pro socialism sentiment will be very damaging to the economy and markets as well.  In a nutshell, he’s predicting a tough road ahead and lots of inflation on the horizon. https://www.schiffradio.com/

This guy disagrees and thinks the government needs to spend more, https://www.cnbc.com/2020/07/22/former-fed-vice-chair-blinder-says-cutting-government-aid-would-be-a-catastrophic-mistake.html but he works for the government, so what else would he say?

 

Ever seen the acronym TANSTAAFL before? You probably have, but you may not recognize it. There ain’t no such thing as a free lunch.

See attached for a piece from our favorite economic team, the smart guys at First Trust Portfolios, with that title. Not quite as dire as Mr. Schiff, but does point to some sobering realties of continuous, unchecked government spending. Long story short, somebody, sometime, is going to have to pay. The longer we stay shut down, the bigger the tab is going to be.

 

You’ll notice that there is no mention of the 800 pound c-word elephant in the room this week. That’s intentional. But in an effort to inject some education and go beyond the sound bite snippets of the main stream media and conventional wisdom, here is a podcast from Ben Greenfield fitness with Dr. Zach Bush. In it, they discuss why viruses are everywhere around us, in the billions and billions, how they work, why they are crucial to our lives, how we adapt to them and more. The discussion gets a little deep in the weeds in a few spots, but I found it a very interesting contrast to the hysterical screaming that we seem to get so much of these days.  Enjoy.

https://bengreenfieldfitness.com/podcast/lifestyle-podcasts/glyphosate/

Long story short, this podcast isn’t short, but it’s got some good data, IMO.

 

And finally, here’s a personal “aw c’mon now” moment.

I invited a couple golf buddies over to my patio for steaks after league the other night. I had to stop at my local market for some supplies before they arrived. Sidenote – shout out to my friends at Plum Market, www.plummarket.com, Their response to the new world in which we live has been nothing short of spectacular. Their stores have remained fully open, fully stocked and spotlessly clean. They sanitize carts and buggies before you grab one, they have masks and gloves available if you need them, their employees are well trained and friendly. Their prepared, and now prepackaged, foods are very well done and delicious.  Plum was great before, but special kudos for the way they’ve handled everything now.  Other retailers should take note. Anyway, as the pleasant young cashier begins ringing up my goodies, which included some adult beverages, I chided her a little as I’m known to do with cashiers, “What? You’re not going to check my ID? I’m offended….”

She giggled politely and continued with my order. Your total is $XXX.XX, would you like to apply your senior discount?

“My what!?  Senior discount!? Now I really am offended! I mean I know that I’ve grown out my salt and pepper hair for the last 4 months, but senior discount??”

Yes.

“Wait, how much is it?”

Long story short, I saved $8.00. But still, c’mon now, senior discount??

 

LF26 – “Age is an issue of mind over matter. If you don’t mind, it doesn’t matter.” – Mark Twain.

 

Have a great week and stay healthy.

 

The opinions expressed are those of Michael Acho and not necessarily those of Lincoln Financial Advisors Corp.  CRN-3172824-072220

 

 

Michael J. Acho, MBA, CFP®
Private Wealth Advisor
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Lincoln Financial Advisors/Sagemark Consulting
1000 Town Center, 26th Floor
Southfield, MI  48075
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Michael.Acho@LFG.com

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