The common train of thought is that the US economy is not doing as well as the financial markets, but we do not see it that way.
There is no disconnect.
Individual investors are driving the market North to new highs, and they are doing it by driving up the prices of the Internet related stocks, the stocks that are benefiting from people working at home.
There is no comparisons between now and the dot-com bubble every market cycle is different.
In the late 1990’s, the dot-com bubble was fueled by a real breakthrough in tech, the advent of the Internet. It was changing people’s lives, and that was a positive change. It got carried to excess.
Today, this is a different. It is a negative surprise: A virus that is changing the way we live, and it is difficult to assess the long-term implications of the change/s.
We do not see an imminent Bear market in here.
The rebuild could take a while, it depends on an effective vaccine, which may or may not arrive by the end of the year a frame that the stock market is pricing in.
So a return to pre-virus state is seen by Y 2022 phenomenon. The economy is about 33% of the way back to normal.
The Big Q: What should investors to do in the meantime?
The Big A: There is a good part of the market that’s underpriced. Airlines, transportation and hospitality have performed poorly, and some represent good value for patient investors who can tolerate the risk as a part of their portfolio. Patience is Key!
Have a healthy day, Keep the Faith!