What happens to the economy if a second wave hits in the winter?
LEXINGTON, Ky. (WKYT) - The coronavirus continues to linger throughout the United States and cases have slowly been rising in Kentucky while the death rate remains low. Independent Fiduciary Financial Advisor Josh Smith of Strategic Wealth Designers joined WKYT to talk about what happens to the stock market and investors' hard-earned savings if the economy were to be shut down by a second wave. Smith says the good news is that a full shutdown is highly unlikely. He says a pullback may occur but a full lockdown like we saw in April shouldn’t be expected.
“Many experts thought the cases would decrease over the hot summer months but we actually have seen a steady rising of cases well into August,” Smith says. “I don’t doubt we may see another uptick this winter but I wouldn’t expect to see a full country shut down again. We may see areas shut down for short pockets of time. Investors can expect to see additional volatility, especially before the election, so regardless of how many cases spring up it is wise to have a portfolio with some safety built into it.”
What started as an unknown and distant virus in China and Europe quickly made its way into the United States. Political lines were drawn and different opinions formed quickly about how deadly the virus is. Medical experts continue to learn more about who is most impacted by the virus, while the race for a vaccine is on. Smith said the elections taking place locally and nationally across the country will have a direct impact economically going into 2021.
“Some states are open and welcoming visitors with open arms like Florida, Tennessee, or Indiana even. Others like California, Hawaii, or New York have been much more limited in letting visitors access their state,” Smith says. “It’s a difficult balance between the economy and the discussion of safety. A historic amount of unemployment filings continue to roll in each week and the economy is suffering. We will find out all across the country what matters most to voters, is the economy the bigger concern, or is safety the bigger concern. Based on the polls currently, the stock market is pricing in a victory by Vice President Biden but in 2016 they did the same thing for Hillary so the only certainty is that nothing is certain.”
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