EC The Mob And The Market

–Unthinkable events … the market sails right through

–Balancing changing politics, insurrection, and asset allocation

–Potential flies in the ointment—Interest Rates, Taxes, and Inflation

–The VIX provides a clue on market sentiment and direction

Protest, insurrection and the market

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What is depicted in my opening image is civil disobedience, rightful protest to redress grievances. What we saw this past week in our nation’s capitol was a pure and simple insurrection, a crime against the Constitution of the United States. Since the market has no moral compass and is only interested in profits and the making of money it did not miss a beat (up 400 Dow points on Wednesday) in the face of a disgusting attack by some aggrieved by the outcome of the November 2020 election. For some reason, all of the failed legal challenges alleging fraud, many adjudicated by Republican-appointed justices, meant absolutely nothing to these people. I guess some people just do not want to be confused by verifiable facts.

Only one other time in the 244-year history of our republic did the outcome of an election result in violence, the election of Abraham Lincoln in 1859. That outcome was the Civil War. It is time to turn down the divisive rhetoric and work together to solve the many important problems we face as a nation.

The Market and The Mob

As I have said before you cannot let your political predilections get in the way of your investment policy. Just because you don’t like a political party or what they ostensibly stand for, not to invest or to sell based on those biases is not wise. Shocking and appalling as the events of the past week were, investment based on fear or bias generated by them is also ill-advised. On this count we have to hope we get through this period, coming out the other side as a better stronger country. MEANWHILE, THE MARKET DOESN’T CARE.

What it does care about is the generous amount of rocket fuel in the tank of the economy from the recent injections of stimulus via tax cuts, two rounds of COVID-19 stimulus (with another potential batch on the way). Not to mention one of the upsides of a Democratic Congress, the potential that they may get something positive done on our declining national infrastructure (more stimulus). Lest we forget, the Federal Reserve is committed to keeping rates low until we begin to approach full employment (I think that number would look like about 3.5%).

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Disclaimer: The information presented here represents my own opinions and does not contain recommendations for any particular investment or securities. I may, from time to time, mention certain ...

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