We’ve received numerous questions from clients asking about the new Biden administration and its relationship with Wall Street, as well as the potential impact of new policies on the economy, markets, energy and municipal bondsA financial instrument representing an IOU from the borrower to the lender. Bond issuers promise to pay bond holders a given amount of interest for a pre-determined amount of time until the loan is repaid in full (otherwise known as the maturity date). Bonds can have a fixed or floating interest rate. Fixed-rate bonds pay out a pre-determined amount of interest each year, while floating-rate bonds can pay higher or lower interest each year depending on prevailing market interest rates.. Chief Investment Officer Jim Lowell explains his thinking in our recent webinar,* A Tale of Two Recoveries: Will Main Street Catch Up With Wall Street?
Please enjoy the excerpt below and click here for the full webinar replay to hear more.
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One of the things we think we will see is a more diplomatic approach to a range of issues and industries, and a steadier approach in terms of the administration’s focus on rules and regulations that may or may not impact investors. We saw a familiar face return to leadership just yesterday: Treasury Secretary Janet Yellen, who with the Federal Reserve clearly is in favor of continuing to not just think and talk but act big when it comes to more stimulus to ensure that our economy’s road to recovery is safeguarded.
Ultimately, there will be some industries that will be called out as potential thorns in the side, probably energy and big oil. But, don’t forget, inside of energy there’s a whole range of alternative energy possibilities with greater government funding, all the way to swapping out government vehicles to more environmentally friendly battery-operated vehicles that could have significant positive impacts.
It’s hard for us to think that municipalities won’t benefit from greater stimulus in terms of real infrastructure spending. Whether that’s roads, bridges, sewer systems, energy grid…but also the technology superhighway. Of course, we’ve learned a tough lesson in 2020 in terms of how lack of access to the technology superhighway was an impediment to opportunity and growth for us as a nation.
While there may be some difficult days ahead for those who focus only on taxes, if you can lift your head over the tax shelf, you will see what we think will be significant opportunities. A range of them, assuming, of course, that the vaccination process takes hold, that COVID-19’s current mutations don’t worsen or weaken the application of the vaccine, and that there is a global fix for the current pandemic.
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Click here for a replay of A Tale of Two Recoveries: Will Main Street Catch Up With Wall Street? Please contact us at (800) 492-6868 to learn more about our comprehensive wealth management solutions.
*Webinar recorded after the market closed on Wednesday, January 27, 2021.
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