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Economic Bifurcation

Sigma Investment Counselors

September 9, 2020

The U.S. economy appears to be bifurcating at an unprecedented rate.  Unemployment, particularly in the service, retail, live entertainment, hospitality and other sectors is epidemic, while many professionals, able to work at home, are maintaining their income, enjoying a lower cost of living, and for some, significant gains in their corporate stock plans.

Pandemic driven employment data has increasingly shown that the service sector employs an ever growing number of Americans in the business of feeding, caring, and generally making life better for other Americans, especially those that are relatively well off.

At the same time, it is now clear that the pandemic has accelerated the adoption of certain technologies, particularly those that support automation and remote work.

Investors should understand that it is impossible to accurately predict how the pandemic will affect the economy and investment opportunities.

At least in the short run, despite significant economic disruption, the best known common stock averages are at or near record highs.

Longer term, the best strategy is probably going to continue to be based on a balanced portfolio with a focus on growth and diversification.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA

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