The Prudent Retiree - What's Going On Part XII

Nice guys finish last. You’re judged by the company you keep. Money can’t buy happiness. When you smile the whole world smiles with you.  

Why is the market going up? I’ve been asked this many times in the past few weeks. COVID-19 continues to stalk us. Much of the economy is in shambles. Unemployment is rising to Great Depression levels. At best, there seems to be only a peep of light at the end of the tunnel. The market, though, has rallied strongly from what has so far been the Corona bottom. Why?  

Opinions vary. Many think the curve is bending and states are trying to reopen their economies. Others think this is way too soon and could pose a grave risk. Prudent Retiree doesn’t know and can only comment on what the market is doing in response.  

I started this note with numerous old sayings you’ve all heard. Every business, sport or hobby seems to have one. When I began my career, the first one I heard was “Don’t fight the Fed.” The Fed has come out fighting to protect the economy and markets from the impact of COVID-19. They have lowered interest rates to essentially zero and resumed aggressive Quantative Easing. They have unequivocally stated they will make available whatever liquidity is needed to buttress the economy. The market has moved higher since the Fed took these actions.  

We of course don’t know how the virus will play out and what the market will do in the short run. We believe it is best to maintain current allocations. There is significant uncertainty, but our recommendation on risk—Don’t fight the Fed.    

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Horseman Group – 3 CityPlace Drive - Suite 290 – St. Louis, MO 63141 – 314.692.7842 – www.horsemangroup.com  

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