An unknowable future becomes more so

“In the best of times, predicting the path of the economy with any certainty is difficult. We are now experiencing a whole new level of uncertainty, as questions only the virus can answer complicate the outlook.”

– Federal Reserve Chairman Jerome Powell, quoted in a New York Times article on 5/21/20. He and several Fed colleagues said the timeline for an economic recovery is far from obvious. Read more at nyti.ms/2yA01WR

A second chance

“A number of investors...have discovered during this crisis they don’t have a plan or strategy, just a portfolio of holdings. There’s a huge difference between a smattering of individual securities or mutual funds and an investment plan. The market’s recovery has given every investor who has been holding on for dear life a reprieve to figure out an asset allocation that fits their willingness, ability and need to take risk. If you don’t know what you own and why you own it, a bear market is a bad place to find out.”

– Ben Carlson, in a 5/10/20 post on his
A Wealth of Common Sense blog. Read more at bit.ly/2Xdfx38

Black Friday comes early

“It’s tough to generate inflation if people don’t believe in it. After all, why would anyone ‘chase’ goods if prices stay the same or fall? Delaying consumption could mean getting a discount later.”

– Kathy Jones, Schwab’s chief fixed-income strategist, in a 5/13/20 article on the company’s website. She said there is reason to be concerned about deflation in the short-term. Read more at bit.ly/2THmnwL

Understandable doubts

“Long-term thinking looks easy in a spreadsheet. You can look at a long stretch of history and say, ‘If you just put up with a few lousy years you went on to capture excellent returns.’ That’s good thinking. It’s right thinking. But the real world doesn’t play out in spreadsheets…. It plays out at the dinner table, where you have to convince a spouse that your net worth has plunged but, don’t worry, it’s all part of the plan. It plays out in your own head, when you start to wonder whether your poor performance means you missed something.”

– Morgan Housel, in a 5/14/20 post on the Collaborative Fund blog. Read more at bit.ly/36icwTn