The flip side: <\/em>Concern that share prices may not be sustainable. \u201cThe long, long bull market since 2009 has finally matured into a fully-fledged epic bubble. Featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior\u2026this bubble will burst in due time\u2026,\u201d wrote asset manager Jeremy Grantham of GMO in January 2021.
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The flip side:<\/em> Vaccines may not be as effective as many anticipate for two reasons: 1) Some Americans are reluctant to be vaccinated, and 2) Vaccines may not be effective against all strains of the virus.
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That seems particularly important since employment gains have slowed. Last week, Carleton English of Barron\u2019s reported, \u201cAll told there were 20.4 million workers receiving benefits under programs for the week ending January 23, a 2.6 million increase from the prior week. At this time last year, there were 2.2 million workers receiving benefits.\u201d
The flip side:<\/em> Too much stimulus could cause the economy to overheat, lead to inflation, and cause the Federal Reserve to raise rates. The bond market has already been pushing rates higher. Last week, the yield on 30-year U.S. Treasuries rose above 2 percent for the first time since February 2020.
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The flip side: <\/em>While many agree U.S. infrastructure needs repair, the cost may be paid through higher taxes. There is ongoing debate about whether tax increases impede or accelerate economic growth, according to Jim Tankersley of The New York Times. In addition, government spending of this type is another form of stimulus, which could heat up economic growth.
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Last week, Colby Smith of Financial Times reported numerous economists have increased U.S. gross domestic product (GDP) growth estimates for 2021. Estimates ranged from 5.9 percent to 6.3 percent.<\/p>\n\n\n\n Throughout history, inventions and new ways of doing things have changed the world:<\/p>\n\n\n\n <\/p>\n\n\n\n It would have been difficult to understand or estimate the long-term value of these innovations. It\u2019s possible some of today\u2019s innovations could have similar impact. One is machine learning. Machine learning uses algorithms to turn a data set into a model that can improve our understanding of a topic. For example, machine learning is being applied to: <\/p>\n\n\n\n \u201cThere is no recipe, there is no one way to do things \u2013 there is only your way. And, if you can recognize that in yourself and accept and appreciate that in others, you can make magic.\u201d<\/p>\n\n\n\n Investment advisory services offered through\u00a0Keystone Financial Services, an SEC Registered Investment Advisor. These views are those of Carson Coaching, and not the presenting Representative, the Representative\u2019s Broker\/Dealer, or Registered Investment Advisor, and should not be construed as investment advice. This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker\/dealer. Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate. Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index. All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client\u2019s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index. The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce. The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. The Dow Jones Industrial Average (DJIA), commonly known as \u201cThe Dow,\u201d is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets. Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. Past performance does not guarantee future results. Investing involves risk, including loss of principal. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete. There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Asset allocation does not ensure a profit or protect against a loss. Consult your financial professional before making any investment decision. Please contact our office if you would like a list of sources used in creating this content.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Way back, when radio disk jockeys played 45-rpm vinyl singles, the A-side of a disk was the song the record company was promoting and the other side \u2013 the flip side \u2013 held a song that sometimes had an equal or greater impact. For instance, the flip side of Queen\u2019s We Are the Champions was […]<\/p>\n","protected":false},"author":14,"featured_media":4283,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","meta":{"_acf_changed":false,"post_statement":"","post_description":"","post_cta":"","post_button":"Read More","post_button_url":"","compliance_id":"","post_disclaimer":""},"categories":[],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/oi_article\/4279"}],"collection":[{"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/oi_article"}],"about":[{"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/types\/oi_article"}],"author":[{"embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/comments?post=4279"}],"version-history":[{"count":0,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/oi_article\/4279\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/media\/4283"}],"wp:attachment":[{"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/media?parent=4279"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/categories?post=4279"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/tags?post=4279"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/www.keystonefinancial.com\/wp-content\/uploads\/2021\/02\/Screen-Shot-2021-02-16-at-11.42.47-AM.png\")
<\/figure>\n\n\n\nInnovations Can be Difficult to Value<\/h3>\n\n\n\n
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—Ara Katz, Entrepreneur<\/em><\/p>\n\n\n\n