Good Bad and Ugly

Many financial prices and indexes have changed dramatically in our economy. Our social distancing has affected not only our lifestyle but our purchases. These effects create the good, the bad, and the ugly relating to everything occurring in the financial and economic arena.

The good news about lower interest rates is that the cost of borrowing is so much less. With historic low interest rates, it’s the perfect time to refinance a high-interest home mortgage. It’s a bad time, even a challenging time, for those requiring interest income for their savings and retirement. Rates are low for most interest-bearing investments. Low interest rates reflect an ugly period of time because ultra-low interest rates reflect poor economics and may indicate the risk potential of a recession.

Rising gold prices coupled with declining oil prices project economic uncertainty. Gold is rising because of fiscal government deficits, job losses, and fears of a stock market collapse such as occurred during the great depression 90 years ago. Lower oil prices are a result of a glut of both increasing supply and a decrease in demand because we’re all staying home and not traveling.

The good news is that the advancement of this coronavirus seems to be declining. The bad news is so many people have lost their jobs, too many businesses are no longer in business and many will not survive. The ugly is the people who have gotten sick, and the loved ones who have passed.

The abrupt halt to a variety of economic activities has already taken its toll on corporate earnings and with stock prices. Entire industries have been decimated (i.e., the leisure industry) and might take years to come back. The good news is this topsyturvy stock market has started to have signs of recovery. The bad news is the uncertainty, lack of sales, earnings, and revenues, plus high unemployment. And the ugly news is that continued hibernation and its effects including a lack of consumer activity may lead to more excessive market volatility.

Over many years, your professional team at Woloshin Investment Management has lived through the good, the bad, and the ugly successfully steering savings and investments profitably during rough times. The good news is history shows that over time markets always recover from crisis.

We are here for you!

Your friends at Woloshin Investment Management