Spring Is In The Air
Spring is always a hopeful time, a season of rebirth. But this spring seems a little more welcome than most. After more than a year of being on the dark side of a worldwide pandemic, it seems the light may be returning. Of course, everyone still needs to exercise caution – we are not out of the woods yet, as recent COVID-19 numbers are showing. But the availability of vaccines is making a return to normal seem possible in the relatively near future.
That normal will allow grandparents to hug their grandchildren, kids to go back to school, people to go out to dinner with friends and to travel for business and pleasure. And what it means for investors is also likely to be good news. Stimulus checks that are in the hands of consumers already are having a positive effect on the economy. As stores open up, people who have been avoiding shopping for more than a year are likely to head to the malls. Low interest rates probably will continue to fuel a hot housing market.
Low interest rates also played a part in the strong rebound of the stock market from its March 2020 lows. With interest rates so low, investors are drawn to stocks in order to secure returns, and this is likely to continue as the pandemic recovery continues.
There are some possible problems, though, and the largest threat is inflation. The inflation rate for 2020 was about 1.5%. It was affected by the pandemic, but it is not clear what effect the easing of the pandemic will have this year. Most experts do not expect a big increase in inflation for 2021. But if the last year has taught us nothing else, it has taught us that predictions are not the same as assurances.
That is why, especially as we feel a sense of hope after a long and discouraging period, it is important to keep to some investing fundamentals. At Peachtree Investment Partners, we believe in investing for the long term, and we follow an approach that we believe offers the best chance at success over time.
We focus on the stocks of large American companies that have strong and experienced leaders. We choose companies with good return on investment and a long history of consistency in revenue and earnings growth.
We also believe strongly in stocks that pay dividends. Reinvested dividends can help to grow your portfolio significantly over time. They also provide a shield against market volatility because all your return does not come from an increase in the stock price.
So enjoy the spring. Re-enter with caution, but also with hope. And if you would like to discuss your portfolio, don’t hesitate to give us a call.
Garry K. Schaefer
April 27, 2021
Peachtree Investment Quarterly may offer general financial, insurance, tax and business ideas. However, due to the ever-changing tax laws as well as the complexity of the financial industry, you should seek professional advice before implementing any of the ideas contained in this newsletter. Peachtree Investment Partners, LLC(TM), and Osmosis Digital Marketing, Inc. assume no liability whatsoever in connection with the use of this newsletter.
