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Stay Diversified in an Uncertain Covid World


President Y H & C and a Portfolio Manager for Interactive Advisors

The dominant consideration for the year ahead remains the question of the Covid-19 pandemic and how quickly the US can start to see progress in reducing the number of infections, hospitalizations and deaths. 

A major challenge will be vaccinating a majority of the population safely.  In combination with the number of people who already have been infected, the vaccine rollout and progress in antiviral treatments provide hope that at some point in 2021, society will start to return to normal.

How long will this take?  It may be four, six or nine months or even a year.  It’s anybody’s guess in my view. 

Market Shifts

From a market perspective, as investors see improvement on the Covid front, in my view, investor sentiment will change. In my opinion, the stay-at-home and closed-economy corporate beneficiaries will have more competition from businesses that benefit from a more normal society. 

In my opinion, we could see quite a bit of change on the interest rate front and potentially with inflation. In that scenario, bond yields will become more volatile, especially at the long end of the curve.  Bond volatility will bring heightened equity movement as well. 

How does one prepare their portfolio for these kinds of circumstances?  If you have a well diversified structure, which means a variety of industries and companies, your ark will handle the pandemic rain quite well.


If you are relying on what has worked for the last year, or maybe the last decade, you might think about where you have a lot of risk exposure. 

Markets change, and it can happen quickly.  What worked for the last ten years may not do so well in the decade ahead. Build your ark accordingly.

Originally Posted on January 26, 2021 – Stay Diversified in an Uncertain Covid World

Disclosure: Interactive Advisors

This material is not intended as investment advice. Interactive Advisors or portfolio managers on its marketplace may hold long or short positions in the companies mentioned through stocks, options or other securities.

Pursuant to the Investment Management Agreement between Interactive Advisors and its clients, all brokerage transactions occur through Interactive Brokers LLC, an affiliate of Interactive Advisors. Interactive Advisors does not offer services through any other broker-dealer. The use of an affiliate for brokerage services represents a conflict of interest. Interactive Advisors clients acknowledge this conflict of interest and authorize Interactive Advisors to execute transactions through Interactive Brokers LLC when they open an Interactive Advisors account. Clients should consider the commissions and other expenses, execution, clearance, and settlement capabilities of Interactive Brokers LLC as a factor in their decision to invest in an Interactive Advisors Portfolio. Interactive Advisors believes it can meet its best execution obligation by trading its clients’ trades through Interactive Brokers LLC. While there can be no assurance that it will in fact achieve best execution, Interactive Advisors does periodically monitor the execution quality of transactions to ensure that clients receive the best overall trade execution pursuant to regulatory requirements.

Disclosure: Interactive Brokers

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