IIBUSINESSII
SET YOURSELF UP FOR SUCCESS
INVESTMENT LESSONS FROM THE PANDEMIC STORY BY MICK KUEHN
With 2020 barely in the rearview mirror and the headlines thus far in early 2021 feeling similar to last year’s COVID-driven challenges, investors may find themselves scratching their heads wondering why the stock market continues to establish new highs and what they should do in the face of this. How do you protect yourself from the potential for renewed market volatility? Will the rollout of the vaccines push the market even higher or are companies over-valued and due for a correction? The stock market, as a forward-looking entity, is looking past COVID to a time, hopefully in the nottoo-distant future, when the set of recently approved vaccines have been widely administered, and herd
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immunity has been achieved. In other words, the stock market is refocusing on the trends that will dominate when life starts to look normal again. Despite its generally upward trajectory recently, this is not to say that the stock market will continue to increase uninterrupted and without periodic corrections. On the contrary, the market valuations will continue to be unpredictable in the short-term — in fact, there has been an average annual intra-year correction of approximately 14% since 1980. Yet, in spite of this “volatility,” the S&P 500 has increased from 108 at the beginning of 1980 to 3,756 at the end of 2020. So, what can you do to set yourself up for success
