February 2021
Market Update

The day will come when we can resume some normalcy in our life. The conversation in my household sounds a bit wistful talking about “what we’ll do when … “ but you can be sure that a resumption of our wanderlust is high on that list! I was thinking about future destinations this past month as we have watched the news with some dismay (which I have decided is not suitable for anyone’s mental and emotional health, no matter what) regarding the efforts to get the world vaccinated. The pandemic we have all endured for almost a year now has taken the lives of more people than there were US soldiers killed in World War II. And it was during World War II that we realized some of those most amazing leaps in logistical planning ever seen – second only, perhaps, to landing on the moon.

I am not a war buff, but I am a Francophile, and so it’s impossible to spend time in France and not want to visit the beaches of Normandy. It’s a trip I highly recommend for many reasons (I don’t think there is better butter anywhere in the world), but the obvious purpose is to visit the many sites that were key to turning the tide of that war. The D-Day beaches, the Normandy American Cemetery, and the World War II Museum in Caen are the better-known destinations. Still, I was fascinated with the Embarkation Museum in Arromanches-sur-Bain, just west of the D-Day beaches. Here you will find the stories behind all the logistical challenges that the US and its allies had to surmount to make this tiny village a central location for landing ships (where there was no dock and the waters were unfavorable) and resupplying troops during the invasion. The ingenuity the Allies brought to solving so many problems was as inspiring as it was fascinating! The things we can do when we pull together for a greater good.

So I was hopeful when it was reported last year that the US Military was in charge of distributing the vaccine here in the US, that we would see some of that same brilliance in managing our way through this herculean effort. For us to return to normal, to see our economy get back on solid footing, and kids back in school, we must get to the point where we have herd immunity. That can be achieved through the development of antibodies for those who successfully survived the virus or through immunization. Herd immunity will provide the reassurance necessary for people to feel safe to return to building our economy and their lives.

Let’s just say we are off to a slow start (see our Graphic of the Month). No-fault of our military – they did their job in making the deliveries to the states. It is at the state level where things have fallen far short of logistical brilliance!

Friday, just as the first month of this year wound to a close, we had news from both Johnson & Johnson and Novovax regarding their third-round clinical trials. That news looks good, as both showed solid results – and via more traditional vaccination mechanisms where there is no special refrigeration required. They both will file for emergency approval of the vaccine as early as this week, and the vaccine may be available to ship within a few weeks after that. These are positive developments for the balance of this year if we can just come together to fix the scheduling issues we see across every state. Maybe then, we see things get back to normal. 

We certainly did not start off the year with ‘normal.’ Between the eventful transfer of power in Washington and now the headline-gripping short squeeze occurring with several stocks (Gamestop, AMC, and others) – volatility has returned to the stock markets. The final weeks of January saw a reversal of the steady upward climb markets have enjoyed over the past few months, although the S&P finished only slightly negative for all that drama.

We have said many times that the markets are driven less by headlines and more by the Federal Reserve's monetary policy and the business cycle in which we find ourselves. Years like 2020, months like January, it is a challenge to see how that will still hold true, and we acknowledge that all these events (and probably a few others we can’t see coming yet) will continue to create market volatility. But at the end of the day, we still hear Chairman Powell, head of the Federal Reserve, maintaining their stance of low-interest rates and continued bond purchases. The Biden administration has a $1.9 Trillion additional stimulus package on the table – that does not even begin to touch on the infrastructure spending we felt would meet with bi-partisan support, so that is likely still to come. And earnings announcements have primarily been positive as the 4th quarter saw consumers spend more and companies continued to figure out how to drive expenses down and profits up.

Your portfolios remain fully invested here. We picked up some additional small company stocks and a smidge of international as the rotation to all parts of the market and not just technology, stayed steady. We will continue to monitor the headline volatility and the government's monetary policies, and our models will help give us direction. As always, if you find you cannot sleep at night, we encourage you to speak with us so we can make appropriate adjustments to your portfolio. 

In closing, let me share that the extended family at Copperwynd has seen more than its fair share of loss over the past twelve months. Not all losses were directly related to the virus, and it is never our intent to impose any medical, spiritual, or political beliefs on anyone. We want everyone to have their best shot at the future they are planning for. Reaching herd immunity is going to be critical for that success.

If you have questions, please contact us.

FINANCIAL PLANNING
COLLEGE AND TAX PLANNING
401(K) ALLOCATION
GRAPHIC OF THE MONTH

To download the February 2021 Newsletter: CLICK HERE