We Will Believe It When We See It!
by Eric Nager on Mar 25, 2020
This may be the attitude of people regarding the promised government stimulus currently estimated to be $1.2 trillion with more indicated beyond that. This mind-set has been putting continued pressure on the economy and the markets. The fact that it is beyond rational makes no difference when fear is the driving emotion. Of course, it would be very helpful if the government would stop the talking and begin distributing the stimulus money – people want to see it, not hear about it.
Our Congress and Administration seem to be coming to terms, and the Fed has already committed to inject trillions of dollars; but when? The American people and investors don’t have much patience right now. LET’S GET IT DONE!
UPDATE: At this time, we have been continuing to raise cash in our accounts; yesterday we began to add a fund that actually benefits from a declining market. We are doing these necessary steps while we wait for the time when we can deploy the cash, sell the defensive fund, and take advantage of the opportunities that the end of this crisis coupled with all the FED money creation will bring.
A little bit of optimism: On March 11 Goldman Sachs’ David Kostin – their chief U.S. equity strategist wrote that: “he expects a rebound in the back half of 2020 to boost the S&P 500 to 3,200 by year’s end.” It sounds a bit optimistic considering where we are, but the idea of a strong post-crisis rebound is credible.