Hope in the midst of the Covid-Crisis
There are exciting days behind us. The outcome of the US presidential election seemed narrower than the final result will probably be owing to the time-consuming counting of the many votes. But that does not stop the incumbent President Donald Trump from ignoring the election result. In a flood of lawsuits, he is trying to discredit the elections.
Financial markets are not worried. This is also due to the fact that, despite the run-off for the two Senate seats of Georgia, a majority for the Democrats in the Senate is an unlikely scenario. This will make it more difficult for Democrats to govern. Possible tax increases are therefore off the table. On the other hand, a new relief program is still within reach. The compromise plan is an impressive $1.5 trillion.
Far more than after the US election, the stock markets have reacted positively to news about the development of a Covid vaccine. Although there is no guarantee that the first promising results of the studies will be confir-med, the response shows two things: First, an early end to the corona pandemic was not yet fully priced in, despite the impressive recovery in stock markets. Second, expectations remain more important for investors than the here and now.
This means for the portfolio: to diversify in order to benefit in a recovery, but not to be caught off the wrong foot by possible setbacks. This is reflected by the tactical allocation which has been confirmed by the Investment Committee.
