Click here to watch our latest video Agili Market Insights: First Quarter 2021 Views.
Agili President, Michael Joyce, begins the video saying 2020 did not feel like one year – it felt like ten! “When 2020 began, little did we know we would have a pandemic and then an economic shutdown and then pretty much a full recovery. Now the markets are higher than they’ve ever been before.”
At Agili, we believe there is pent-up demand that will fuel higher economic growth. And with this anticipated higher economic growth, some of the $5 trillion that is sitting on the sidelines in money market accounts will be invested.
When opportunity presented itself in the Spring, your team at Agili took advantage, but we didn’t let our guard down in the event of a market correction. We stayed diversified – and diversification certainly helped as the market was falling. Then, we all experienced a v-shaped recovery.
But Main Street has not yet recovered. The economic recovery on Main Street continues to lag behind Wall Street at least in part because of the slower-than-anticipated distribution of the coronavirus vaccine.
In 2020, inflation was essentially non-existent. While the Federal Reserve’s long-term inflation goal is about 2%, Chairman Jay Powell said they would allow inflation to go a bit above 2% before tightening monetary policy. There are some pundits who believe the stimulus spending is going to be more inflationary than anything we have seen in quite some time, but we are more sanguine about the prospects for inflation.
With regard to taxes, as stated earlier, we don’t anticipate that a Biden Administration is going to “crater” what will still be a very fragile economic recovery by raising taxes in 2021. It is possible taxes could be raised in 2022, but that will depend on the midterm election outcomes.
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