If we had felt in control of anything prior to the spring of 2020, the global pandemic loosened our grip—or broke it entirely. We were forced to pivot and adapt to changes to almost every single aspect of our lives, both small and significant. I’m sure most of us (if not all) are tired of the curveballs that keep getting thrown our way.
Believe it or not, we’re now halfway through 2021 and on our way to putting COVID-19 behind us. Now is the perfect time to take stock of what’s happened so far in 2021 as we continue recovering—emotionally and economically—from the pandemic.
Stock Market Performance
As vaccine rollouts have allowed many businesses to return to normal, some experts believe we may be entering a booming economy. (1) Stock market performance has been mildly volatile in the first half of this year with an overall trend toward growth as the S&P 500 recently reached new highs. Many experts have warned that while they are optimistic about market performance in 2021, that performance will likely be riddled with volatility throughout 2021 and in the coming years. (2)
A Shaky Return To Normal Employment Levels
It has been generally expected that as businesses reopen to full capacity, the number of unemployment claims and levels of unemployment will return to normal. As many of us have seen in the news, however, this is currently not the case. (3) Along with other businesses in the hospitality industry, restaurants are especially struggling to replace their workers and remain understaffed in the face of increasing demand from consumers.
Some commentators believe workers are reluctant to return to work because of continued unemployment assistance from federal and state governments. Others argue that many workers are unable to return to work yet because they are still wary of the coronavirus, are unable to find affordable childcare, or now have the time to look for more stable, higher-paying work outside of the hospitality industry.
Whatever the reason for the worker shortage, worker benefits and wages may undergo drastic changes in 2021 and beyond as the economy returns to normal. In any case, getting workers back into the workforce remains a key component of the U.S. recovery plan.
Interest Rates & The Federal Reserve
Interest rates continue to remain low, as the Federal Reserve has promised. In an effort to encourage consumers to keep borrowing, the Fed has kept interest rates near zero since the onset of the pandemic. However, home prices have surged over the past year, with some sellers experiencing multiple offers on their homes in the same day.
How Should You Respond?
2020 and 2021 have taught us that market performance may not just be impossible to predict with accuracy, but perhaps it’s impossible to predict at all. The truth is, we never know what’s around the corner, but don’t let that keep you from taking steps to protect yourself and pursue financial freedom.
Like never before, it’s vital to have confidence that the financial decisions you’re making are moving you toward your goals. At Pinnacle Family Advisors, we specialize in helping our clients reach financial independence using sound financial strategies that align your day-to-day decisions with your long-term financial plan. To schedule your review, email me at [email protected], call (417) 351-2942, or use my online calendar. I look forward to hearing from you!
About Michael
Michael Vaughn is a Certified Financial Planner™ (CFP®) and Vice President at Pinnacle Family Advisors (PFA) with 20 years of industry experience. Before joining the PFA family, he served clients with investment management and retirement planning at The Mutual Fund Store for 14 years. Michael graduated from Missouri State University with a bachelor’s degree in business administration and management and earned his CFP® designation in 2004. He also served 20 years in the Missouri National Guard, retiring in 2007 as a Major. He currently volunteers on the board of directors for Good Dads and Fellowship of Christian Athletes. Michael is married to Lori and they have two daughters. To learn more about Michael, connect with him on LinkedIn.
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(1) https://www.cnbc.com/2021/04/09/the-economy-is-on-the-cusp-of-a-major-boom-and-economists-believe-it-could-last.html
(2) https://www.morganstanley.com/ideas/stock-market-outlook-2021
(3) https://thehill.com/policy/finance/economy/556235-chamber-of-commerce-worker-shortage-crisis-deepening