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The Omicron Economic Fulcrum

The Omicron Economic Fulcrum

| November 30, 2021
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Interesting article. Nothing really new if you've been reading the FCU blog or the articles I've shared from it,

Nothing economically has happened yet, but people have been scarred by the past two years, and are appropriately worried about a lock down, which, in essence, halts economic activity, particularly to our millions of small business owners.

Those in power to command lockdowns seem to be cognizant of that, although it may come down to which way do you want your life possibly messed up.

Still... it seems to be all coming down to whether or not the vaccine will work about the new variant, or whether they can adapt the vaccine to do so. If they can... we should be good to go, at least as far as the investment markets are concerned.

A little blurb from the linked article...

"However, Omicron may yet “trigger growth downgrades, worsen risk sentiment and have significant sectoral impact. We are concerned about the human toll and expect renewed restrictions on activity,” BlackRock warned in a note on Monday.

“We still favor equities for now, but would change our stance if vaccines or treatments were to prove futile. If they are effective, the strain only delays the restart of economic activity, and we would lean against any stock market pullbacks,” the investment giant added.

That qualified bullishness is why a new Deutsche Bank poll found that a slim 10% of financial market players think the new variant will be a “significant event,” with 60% thinking it will only have a moderate impact and 30% thinking it’ll be a complete non-factor."

Of course, none of those "financial Market Players" can tell the future.

My own thoughts? There is a chance we stay the course as far as the current allocations are concerned. If I make changes, it's going to be incrementally between bonds and equities, and between the various kinds of equities our portfolios contain. But none of the changes are going to be drastic. In the bigger picture, this is going to be volatile for a little while. I don't know how long "little" means, but I do know we invest for the longer term, and this will probably not play a role in longer term expectations. In the shorter term.... the risk level built in to your accounts and portfolios should be appropriate for you. If they are, you should be fine.

Linked Article:

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