The country has suffered in big and small ways during the past year. Incomprehensibly, more than 500,000 of our loved ones passed away in the U.S. this year alone. It is still hard to process the reality of our new world.
Perhaps one positiveoutcome from COVID was the medical breakthroughs made in the form of messenger RNA (mRNA) technology, as utilized in the Moderna and Pfizer coronavirus vaccines. This new tool is already revolutionizing the way we treat other diseases such as HIV and cancer, to name a few. For example, in experimental cancer vaccines, doctors extract the tumor samples from the patient, sequence the genome and create a specific RNA therapy to teach the immune system to destroy only the cancer cells, unlike chemo which destroys everything and takes a toll on the human body. This could revolutionize the healthcare industry and has the potential to help people live extended, fuller healthy lives in the long run.
In the shortterm, COVID vaccines are the light at the end of the tunnel which could jump start our global economic recovery. The U.S. stock market has already reached record highs. The S&P 500 index of large company stocks gained 5.77% and smaller companies measured by the Russell 2000 were up a whopping 12.7% in the first quarter! The tech-heavy Nasdaq Index was up 2.78%, as consumers wondered if technology would take a back seat when the country fully reopens. Real estate, measured by the Wilshire US REIT index, was up 8.81% in Q1, and the US Bond market finally saw coupon rates on the 10-year Treasury bond rise to 1.67%, up from the all-time low of below 1% in 2020. Internationally, the EAFE index of companies in developed foreign economies gained 2.83% and emerging market stocks of less developed countries were up 1.95%, as measured by the EAFE EM index.
Many weary investors wonder if the current market recovery is premature or a bubble. It’s understandable to be hesitant givenwe’re not out of the woods yet. Consistent and dedicated dissemination of vaccines globally could help stave off new COVID variants and get the world economy back on track. A prudent investment strategy to reduce risk is to broadly diversify your investments across large and small U.S.and international companies. Equity investments can be coupled with bonds for downside protection, should the market dip unexpectedly. Additionally, your investment should be customized to match your risk tolerance. While the quick rise of Bitcoin may be alluring, it may also be more volatile than you need and could possibly impair a secure financial future. If you think your investment strategy may need some fine tuning, now is anideal time to make adjustments and ensure your portfolio is on track for the market to come.
The opinions expressed above are solely those of Kondo Wealth Advisors, Inc., (626-449-7783 info@kondowealthadvisors.com) a Registered Investment Advisor in the state of California. Neither Kondo Wealth Advisors, Inc. nor its representatives provide legal, tax or accounting advice.