We begin the last two weeks of September with stock market drops amid a slowing economy and declining sentiment regarding our nation's ability to control the spread of Covid-19 sufficiently enough to enable businesses to fully reopen and jobs to return. Regardless of where you look, financial, political, health or education, headlines suggest concern for the days ahead. With a bitter election season in full swing, a drag out fight brewing over the replacement of the beloved Justice Ruth Bader Ginsberg, government stimulus slowing and Covid-19 cases rising throughout the world, it seems like the next few months will be a time to remain vigilant and continue to reduce risk.
In light of these events, I am maintaining a cautious outlook and shifting portfolio allocations to a more defensive position. Through cautious vigilance, we have been able to recover much of the losses from March 2020. However, the next fews months will be precarious. We may see either continued declines in stock prices as a new round of layoffs begin in October and possibly even sharper declines if no new treatment or vaccine is announced prior to the start of the holiday season. If a vaccine is announced, we will see some rebound followed by caution given the speed within which a vaccine has been brought to market.
We will not see normalcy return until a vaccine is introduced, public confidence in it is achieved and enough individuals have been vaccinated to enable us to begin returning to business as usual. Even in the most optimistic of scenarios, we have a very bumpy road ahead.