Vaccine news launches stock market sky high
LEXINGTON, Ky. (WKYT) - The stock market post-election was already rising prior to the news of a COVID-19 vaccine showing 90% effectiveness. The DOW took off by more than 1,000 points Monday as the ‘stay-at-home’ stocks took a big nose dive. Independent retirement planning advisor Josh Smith of Strategic Wealth Designers says the vaccine is what the nation has been looking for to get truly ramped up again.
“The election was surrounded by a lot of tension but it was not what was driving the economic concerns,” Smith says. “If the Pfizer vaccine works and sometime next year we come through the tunnel into the light, then the market and the jobs lost should start returning. In regards to your investments, a well-positioned portfolio should be established no matter what comes from the headlines ahead.”
Many stocks like MGM, Delta, and Carnival soared with the news of the vaccine. Their companies having been suppressed or completely closed and have been given new life with the news. Conversely, Zoom, Pelaton, SLACK, and Netflix saw major declines as they’ve been dubbed the ‘stay-at-home’ stocks. For investors, Smith says to keep in mind the sound principles of investing regardless of what day-to-day activity is taking place.
“It’s great news to have a vaccine likely on the horizon. At the same time, we knew the day would come that something would come out to be an answer to COVID,” Smith says. “Airlines, while extremely tempered during the pandemic, were always poised to have a rebound when we saw a new development with the trials. The same could be said for the other risers today. The stocks falling on the news were expected as well. The answer is to not make any rash moves in either direction. Zoom isn’t dying tomorrow because a vaccine is created and the companies rising aren’t going to be in the green every day from now on either.”
In the short term, some unknowns remain. The vaccine will take time to widely mass produce and the nation is seeing the largest outbreak to date with cases rising each week. President Trump has also stated he is going to challenge the election results which could trigger some uncertainty in the nation depending on what develops from that challenge. Smith says to keep your investments focused on a proper asset allocation strategy. Doing this will mitigate any potential bumps in the road.
“Investors have to take a look at their asset allocation strategy at least once a year,” Smith says. “A Financial plan is built specifically tailored to that household. It should be built with volatility in mind. As you are nearing retirement, having your investments outlive you is a good thing. You do not want to run out of money in retirement and the best way to avoid this is properly allocating the investments you have.”
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