Updated: Feb 6
SUMMARY. Focus remains on the drag to economic growth the virus outbreak poses for the year. We view this event as transitory, meaning it won't last very long on its impact, probably limited to dragging 1Q20 growth. Liquidity or money printing is whats the main driver of growth and although that's may wane as we move through 2020 it will still be present. So we view the virus as a media side show and excuse to ratchet lower growth expectations that were unrealistically high. Economically for the week housing continues its strength as does the consumer although durable goods (big tick items) was notably weaker.
INVESTMENT IMPACT. Conservatism still reigns across our model portfolios elevated cash levels which we may to carry for most of the coming year given our expectations of slowing growth later in year into 2021 as elections pass and the effects of trade lessen. Although we have slowly deployed cash with some high quality dividend relatively low valuation names this week. Yields are high across the model portfolios are by design and most whether Aggressive Growth or Income look more similar than different as a result of our conservatism and high cash levels.
For more insights see our website and disclosures found there at BCA. As always contact us for further explanation of how these events can effect your finances.