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07.9.2020 by David Robinson

COVID-19 Vaccine Developments & Election Probabilities - Moving the Markets

Developments in potential Covid-19 vaccines and shifting 2020 election probabilities are going to be among the most significant movers of financial markets for the foreseeable future. Both “story-lines” have enormous implications for our future.

With new cases surging, Covid-19 will remain our public health, social, and economic nightmare until we have effective vaccines that immunize a large percentage of the population. Stay on the alert for news about “Operation Warp Speed”, the federal program that funds companies developing Covid-19 vaccines. Little is known about the details of how the billions of Operation Warp Speed dollars are being spent. We do know, however, that at least four companies have been funded to conduct the large-scale phase three clinical trials that must precede the introduction of a vaccine: AstraZeneca; Moderna Therapeutics; Johnson & Johnson; and most recently Novavax. Pfizer and BioNTech are also working together on a vaccine. Might we see a vaccine by the first quarter of 2021? New York Times CNN medicalcountermeasures.gov/ finance.yahoo.com

The coming November elections are already on everyone’s personal radar but shifting outcome probabilities will move financial markets. Betting markets now strongly signal a Biden win but are also suggesting the possibility of a Congressional sweep by Democrats. PredictIt RCP One implication (of many) of such a sweep is the likelihood of higher corporate and personal income taxes, causing investors to recalculate the coming planning landscape. Keep in mind that four months is a long time when it comes to national elections and that the betting markets and polls are not infallible. CNBC Axios New York Times CNBC

  • Mortgage Rates Are Low: If you have an existing mortgage, we urge you to do the refinancing math. It will not make sense for all but ought to be considered. CNN Buying a home during a pandemic is tricky but can be done. One incentive is the availability of ultra-low credit. Home buyers are taking advantage of it already. CNBC
  • Roth IRA Conversions: We talk about Roth conversions with many clients, but the increasing possibility of higher personal tax rates may suggest moving this discussion to the front burner of your planning stove. Might we have a window to convert some or all of a traditional IRA at historically low tax rates? It is at least something to consider. Schwab
  • Best and Worst States for Retirement: We take these surveys with a grain of salt. Based on our retirement planning experience over the years, few people consult surveys when choosing where to make their home or homes in retirement. But they can be useful in identifying considerations, and it would be difficult not to root for states toward which you might have a bias. For what it is worth, this survey ranked Florida #2, New Hampshire #11, and Maine #21. Kentucky, my native state came in #9. Arkansas ruled at #1, prompting me to renew my watching of Ozarks on Netflix (Laura Linney is such a hoot!) retirementliving.com
  • The Six Golden Rules of Eating for Longevity: A great frustration of mine is the constantly shifting landscape of nutritional advice. From time to time, I find it grounding to return to the concepts contained in Dan Buettner’s Blue Zones where he studied the areas of the world where there was exceptional longevity. The linked article summarizes six findings from the Blue Zones. Some might surprise you. wellandgood.com

A Quote I Like: “It is very hard to predict, especially the future.” Niels Bohr

Short Takes:

Feel free to send us feedback on any topic, suggestions for improvement, or to forward the notes on to anyone who might be interested.

As always, thank you for reading. Stay safe and be well. We look forward to hearing from you and seeing you in time.

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