Spring is definitely in the air. People are out and about again. Several states are lifting mandates. Families are spending money at local restaurants again. Many of the retired and elderly that I know are celebrating their new freedom after receiving their vaccines.
With all this in mind, the key issues in the headlines and on Main Street are these.
- GDP it is predicted to be 6.4% by the International Monetary Fund for 2021 in the U.S.
- Stimulus checks are hitting family bank accounts and there is pent up money being spent. Considering that the typical American family has no savings in the bank, the $1,400 stimulus check is like hitting the jackpot at the casino. In 2019, the Federal Reserve reported that 39% of Americans don't have enough money on hand to cover a $400 emergency.
- The White House and the Congress led by House Speaker Nancy Pelosi are targeting new tax increases on high-income earners, which may change the way people invest and possibly stimulate more contributions to 401(k)s and IRAs in the future.
- The present “debt-fueled growth” after the administration’s comeback economy may not be so problematic because the prior administration actually added $10 trillion in new wealth to the nation’s stock markets via tax and economic reform.
- Infrastructure stocks are predicted to be on the top of many investor idea lists going forward. One popular infrastructure ETFs is symbol (PAVE)
- Inner-city stocks such as garbage management and companies such as: Waste Management (WM) will also remain hot investments.
- Hardware stocks and funds related to chips and storage and information technology remain attractive. Stocks such as Seagate Technology (STX) and Western Digital (WDC) are said to be good picks.
- If the administration brings back punitive estate tax rates where estates are taxed at 40-50% of anything over $2 million-$3 million, this could manifest an excellent opportunity to invest in major insurers that are publicly traded such as Hartford (HIG) and Lincoln Financial (LNC). Second-to-die insurance may become really popular again for families or trusts. Thus, estate planning insurance could come back big-time and even the insurance screening and testing market could grow.
- Speculation on the travel industry is having a new high. Hotel stocks and cruise stocks are speculative but have great potential because of the pent-up demand. While some people argue that cruise stocks may be overpriced considering their debt, many nations such as Italy, Spain, France, and the United Kingdom simply can’t afford to lose the cruise industry income, and many nations will probably subsidize these companies as best they can.
- Also of interest is the ever-growing technology in medicine. Blood diagnostics and blood testing are also hot stock ideas with several early stage companies already having market caps in the billions.
- The vaccines seemed to be working. They say that several of the vaccines can protect you from a number of variants of the virus. If people come back to get shots annually then this business will continue to have a huge profits for Pfizer and Moderna.
In a prior article, I predicted the Dow hitting 40,000 in the coming months. After the Dow gets to 38,000-40,000, there may be a number of institutions that gently move 15% to 25% out of stocks into: cash, gold, precious metals, treasuries, a little crypto, and even re-allocate into BRIC countries — Brazil, Russia, India, and China — or other value-oriented nations.
George Mentz JD MBA CWM Chartered Wealth Manager ® is a licensed attorney and CEO of GAFM ® global education, which is an ISO 29990 Certified professional development company operating in over 50 nations. Mentz is an award-winning author and advisory board member to several companies around the world in education, charities, and FinTech Companies.
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