SUMMARY. We recently, analyzed Biden's proposed multi-trillion Covid-19 fiscal stimulus and was stunned to learn that a family of 4 earning under $75K per year can qualify for nearly $13k in stimulus. However absurd and short lived this is it may likely boost sagging consumer confidence and spending for a time in 2021. It may also tend to increase interest rates and inflation which most seem to be ignoring for now and may ultimately leas to a difficult growth environment beyond 2021. Consistent with our prior thoughts we deem this "sugar rush" short lived possibly leading to a very difficult economic growth thereafter.
INVESTMENT IMPACT. This week we added to our retail exposure and names tied to a recovering economy while trimming technology exposure reducing cash levels overall. We are maintaining our overweight in areas where we believe valuations are reasonable and there exists a significant dividend now or a resumption of a dividend in 2021. We believe if growth slows once again dividends may play an important role in total returns in our model portfolios. We remain cautious on valuations, investor speculation and high growth expectations and are prepared to increase cash levels when appropriate.
Our model portfolio performance has been updated on our website as of 1/31/21.
For more insights see our website and disclosures found there at BCA. The thoughts contained in this newsletters are intended lend insights into BCAs current & future thinking on changes to BCA model portfolios. They are not intended to be recommendations and should not be taken as such. As always contact us for further explanation of how these events can affect your finances. To unsubscribe from our newsletters & website please email us with "unsubscribe" in the subject.