It’s Not Worth the Risk

Is it over? Are we finally coming out of the pandemic? At least 40% of all American adults have received at least one dose of a Covid-19 vaccine. Hospitalizations are down. The stock market is up. Unemployment is down. This has to be the end, right? We aren’t so sure. Covid-19 infection rates are rising again in the United States. France, Germany and Italy are in lockdown. Covid-19 deaths in Brazil are at record levels. International travel is restricted. China’s vaccination rate continues to be in the single digits. The virus continues to mutate.

The improvement of the U.S. Economy is the direct result of the success of the Covid-19 vaccines and the largesse of the U.S. Government. While there is currently an up-tick in Covid-19 infections in the United States, the progress of the vaccine roll-out is protecting the most vulnerable, keeping hospitalizations and deaths down…for now.

The unprecedented monetary support that has been provided by the U.S. government has brought the economy back from the brink. The extra unemployment benefits combined with the direct cash payments to the majority of Americans is directly benefiting the businesses that are open. Everything seems to be on the rebound…and that is our concern. All of this economic activity is being supported by government programs and direct cash handouts. These can not continue forever. All of the economic numbers, whether it is GDP or unemployment, are inflated by the government’s economic response. At some point, the government largesse will end and the economy will have to support itself.

We are placing our priority in keeping your assets safe while earning a fair rate of return. These are unprecedented times. It is our goal to keep your assets intact through the pandemic. At this juncture, we do not feel that it is worth the risk to be fully invested. Our current holdings continue to earn us a fair rate of return, but cash positions in accounts will continue to be elevated.

We know that getting the vaccine can be a difficult decision, but research shows that people that have been vaccinated do not get as sick if they contract Covid-19. Mike has been fully vaccinated without any side effects. Tom is due to get his second dose within a week. Rob is planning to get vaccinated when it is available to him (hopefully within the month). Odds are that Covid-19 will become an endemic disease similar to the flu. The sooner that our healthcare system can manage with the virus, the sooner things will return to normal.

Yours truly,

Michael Cantlon
Thomas Guyett
Robert Gephart