Economic Distortions Created by the Pandemic - Dec 23, 2020

One only needs to walk into a restaurant to see the distortions generated by the Covid pandemic. That assumes the restaurant is open.

Sales at restaurants are down 17% vs one year ago, according to U.S. Census data. But sales at grocery stores are up 11%.

  • The pandemic has re-routed spending patterns.

Some parts of the economy are thriving. Home improvement is up nearly 20% from a year ago. And we see strength in housing, auto sales, and other goods.

But businesses that rely on person-to-person interactions are being stifled by social distancing.

If you’ve watched a football game lately, players are playing in nearly empty stadiums. Elsewhere, airlines, hotels, and movie theaters are under heavy pressure.

Investors corner

Despite the jarring impact from the Covid crisis, the Wall Street Journal ran a story last week entitled, “For Many Big Businesses, 2020 Was a Surprisingly Good Year.”

We might say same for investors that maintained a well-diversified portfolio.

Timing the market is rarely a long-term strategy for success.

Instead, a well-diversified financial plan tailored to your specific needs has historically been the shortest route to one’s financial goals.

If you are adhering to a well-diversified holistic plan, you are to be congratulated. You have chosen the less traveled road.