My mid-year review is a little late this year due to several things: first, the covid 19 is a wild card that changes everything; second, family medical issues has taken-up much of my time; third, my garden harvest was in full swing when I actually jotted down my review. As I write this, the second wave of covid 19 is in full bloom, yesterday marked the highest number of deaths so far in the pandemic. However, every day we inch closer to a vaccine and therapeutics, both which lessen the impact on our economy. We are also getting closer to an additional stimulus package because the election is just 2 weeks away and the holdup has been purely political. I still feel like stocks are the only logical place to invest now because interest rates are so low and likely to stay that way for a long time. If we do see a market correction, there is over 3 trillion dollars sitting in money market funds waiting for a chance to buy stocks at a discount. This compares to 673 billion dollars just one year ago. Therefore, I think pent-up demand will propel stocks higher in the near and intermediate term. As I mentioned in my last post, I am buying a few growth names like Zoom Video (ZM) and Snap (SNAP) and adding to some long-held positions like Intel (INTC), IBM (IBM), and Pfizer (PFE). This strategy combines growth with value and income from dividends. I have come to realize that there are some publicly traded companies who will change the way we work, travel, shop, and play. The key is to recognize them and jump aboard before the big run-up in price. I think Snap will be a game changer because it will allow consumers to "try on" products like make-up, glasses, and clothes virtually. What was once just an annoying playful app will become a useful tool in the future. The lesson here is that just because a technology hasn't been monetized yet, it probably will be at some point just because of its popularity. I can remember when Facebook, Google, and Amazon were not recognized as money printing machines. Finally, a lesson on why every family and individual should have a healthy nest-egg in a non-retirement account. Even though I consider my family well insured against any medical issues, my wife has entered into a course of treatments that are not currently covered by any of my three carriers of health insurance. Fortunately, we have saved and invested for this unexpected event so that she can get the care she needs without any financial hardship.
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