I Sure Want To See Some Positive News...

 But Let's Not Get Too Far Ahead Of Ourselves

Apparently we are now (technically) in "bull market territory" with some indexes at or better than plus 20% from their recent lows. The business news media (or as our friend David Rosenberg refers to them as: "bubbleheads") are all over this.

Please, please, please, please, PLEASE, my friends, take this all with a grain of salt.

We have not even seen the peak of the Coronavirus curve yet.

Yes, the central banks and the governments are promising fantastic and unprecedented support to the economy, but keep in mind, whether it was expected or not, as of last Friday, 3.28 million Americans became unemployed (filed for jobless claim benefits), which dwarfs any previous data since they started collecting it:

This  could spike the unemployment rate to 10% or higher. So, that will now take the U.S., almost officially, into recession. The Canadian unemployment claims case (estimated at over 1 million now) is perhaps even more significant.

Just think of the domino effect here. 

Despite a cheque for $1200, or whatever the government is going to send you, are you going to go out and make anything other than necessary purchases (food, meds, etc.) and cover rent or mortgage payments?

Certainly, at the least, big ticket items will be forgotten, at least for the time being. Consumers will not be consuming. Businesses will not be investing, they will be doing everything in their power to conserve cash (which may mean more unemployment). Earnings guidance is already being pulled.

This is not going to be a "V" recovery like the 2019 bounce, despite what stock market "cheerleaders" want you to think. In fact, I would be extremely skeptical of any advice that suggests that stocks are going significantly higher anytime soon. There is a greater likelihood of another wave of selling when the economic reality starts to settle in. We have to be prepared for that.

The lesson from 2019 was that we didn't pay attention to the fundamentals: economic growth was stalling (remember the trade war?), earnings growth was negative but stocks went higher on hot air. How did that end up?

Instead, get back to your long-term plans and strategize around them. Prepare for the possibility that this might all last a little longer than we might be being lead to believe by the overly optimistic who want to sell you something on their over-confidence.

Please have a look at my blogs from December 29: Expect The Unexpected (Again) or February 13's: Over-confidence .

You may not find what I write laced with wit and humour, but merely a bit of perspective from which to help you make some key financial decisions. What carries greater weight for you, a sales pitch from an advisor or well thought-out coaching?

 Think about who might best have your back when you need it most.

Stay safe! Stay healthy!