2020 has been a doozy of a year, and it’s not done yet: we still have the rest of Q4 and a presidential election to get through, so there are certainly more ups and downs to come.
After a rocky first half of the year, many indicators show that the economy is in recovery mode…but don’t get too comfortable just yet.
Here are the main takeaways from the Q3 economic review:
Q3 Economic Review: Recovery?
After the initial financial blow this spring, we saw signs of economic recovery following the fiscal stimulus. In the third quarter, we continued to see a gradual upswing in the economy. But was it a true recovery, or the calm before the storm?
By the way, we aren’t currently in a recession, even though it might feel that way. But the economy also isn’t in a great place right now. We are in a better place than we were back in March, and slowly climbing upwards.
For example, the unemployment rate this year peaked at 14.7% in April, and was down to 7.9% in September. That being said, when 2020 began, we sat at a 3.6% unemployment rate. So again, we aren’t back to pre-coronavirus levels of economic activity, but we are better than we were in the spring.
The markets have also been improving this past quarter. The U.S. stock market and emerging markets stocks both saw decent jumps this quarter, and international developed stocks and global real estate continue to rise:
Long-term markets are following the same pattern of improvement, with the exception of global real estate, which was down 18.58% overall.
Q3 Economic Review: What’s Next?
Economic indicators are good right now, but be aware that the economy will typically behave erratically during an election year. Given that this election year is paired with a pandemic, there could be turbulence ahead.
What does that mean for you? Not much right now.
Remember that things continue to change quickly in this current climate. Do your best to work proactively, not reactively. You can achieve that by:
- Checking to make sure your portfolio is balanced and still aligns with your goals, but not making any hasty decisions
- Thinking long-term about your investments
- Making necessary adjustments to your financial plan, but keeping up with your investments if you can
Do you need help creating a resilient portfolio? Contact me today to set up a meeting to talk about your goals. You can also download my free ebook for physicians for tips and information about getting your finances on track.