The Second Half Begins – July 9, 2021
If 2021 were a baseball game, we would be rounding second base and heading for third.
A look back at 2021 is encouraging.
- Covid cases in the U.S. have declined sharply from last year’s peak.
- Economic growth has accelerated amid fewer distancing restrictions and the reopening of the economy.
- Employment is growing. Layoffs, as measured by first-time jobless claims, are at a pandemic low.
- Americans are traveling again.
- The S&P 500 Index1 is up an impressive 14% during the first half of the year.
- The Atlanta Federal Reserve’s GDPNow model is off its double-digit peak but is tracking growth in Q2 at a strong 7.8%.
A look ahead
Q3 has historically been the weakest quarter for stocks. While Q3 has been positive 62% of the time going back to 1950, the S&P 500 Index has averaged just a 0.7% rise during the quarter, according to LPL Research.
Momentum has been strong, and the conditions in place that have lifted stocks over the last year remain in place. But timing the market is exceedingly difficult (if not impossible), and we are reluctant to guess where stocks might be in three months.
Therefore, we subscribe to the idea that a well-diversified approach helps mitigate downturns and is the best path to long-term wealth accumulation.
Created 2021-07-09 16:57:44
