Broker Check

What the Second Quarter of 2020 Tells Us Moving Forward

| July 30, 2020

COVID-19 has thrown the world in disarray. The economic fallout of the nationwide quarantine is still playing out in the streets and the stock market. With record-high unemployment rates, and a mostly shuttered economy to curb the spread of the novel coronavirus, the urge to sell was hard to deny. However, in the face of economic turmoil, there have been encouraging signs that the American economy can rebound when the time comes to fully reopen the economy, with encouraging signs of growth in the stock markets. 

Do these early signs of progress mean we’re out of the woods completely? Unfortunately not, but there are signs that the growth can be sustainable. 

Interest Rates Still at Record Lows

At the outset of the COVID-19 quarantine and economic shutdown, the Federal Reserve moved to drop all interest rates to near 0 until the end of this crisis. Since we are still months away from a viable vaccine, the Fed will keep the interest rate near 0 to encourage economic growth, despite central bankers projecting the economy will shrink.

What A Recovering Economy May Look Like

The intricacies of how the economy is going to rebound is a mystery until it happens. The heads of prominent financial institutions have made their best-educated guesses about what it can look like and what investment strategies you should implement over the next few months. With more bullish outlooks forecasting a V-shaped economy rebound curve, others see the curve taking more of a W or L shaped curve as we navigate this evolving situation. Encouraging signs of economic growth during the limited state reopenings have some analysts optimistic for the future. 

Investment Strategies for a Bear Market

Bear markets occur during times of economic uncertainty, like what we experienced in March. Bear markets are defined by extended periods of falling prices that encourage selling. In the wake of that turmoil, it may be wise to take a step back and reevaluate your strategy before you start to panic sell in an attempt to recoup some value. While the equities market has historically been strongest right after the market bottoms out, this is when many investors choose to assess their ongoing investment strategies. This reevaluation can inspire confidence moving forward through the coming year towards an eventual bull market rebound. The following infographic offers more insight into how to operate under a bear market:

At Total Resource Financial, we can work with you to develop an investment strategy with confidence in the current economy. Contact our team today to get started securing your investment future!