Happy (almost) Halloween! I’m so happy about the pleasant, cold weather we are having, which makes it so nice to be outside again.
The markets have held up pretty well over this last quarter even after the latest modest pullback. Perhaps the uncertainties caused by the virus and its related economic toll have dwarfed any that might result from the upcoming presidential election. It’s important for us to remember that the presidency, as powerful a position as it is, has very little to do with the economy as a whole. Congress can push the needle with their fiscal policies, but it’s often more about what they don’t do that makes the difference. Absent any spectacularly bad legislation and tax policy, it is actually all of us, you and I, that make the difference in the broad economic trajectory.
A few months ago, Congress acted fairly swiftly to pass legislation that helped keep families afloat and many businesses solvent as we’ve worked our way through the devastation caused by the economic shutdown. While there is a lot of work to do still, much has been done, not only by the various branches of Federal government but by state and municipal governments as well. I think, though, the real heroes of the fight against the virus can be found all around us: the frontline workers in the hospitals, food banks, restaurants, grocery stores, and public safety have made all the difference. In addition, millions of families nationwide tightened their belts to give a bit more to relief efforts, opened their homes to strangers in need, and selflessly gave their time and energy to help. Heroes are all around us and it makes me proud and grateful to see our communities rise to the challenge.
As investors it is important to remember that markets are forward looking and dislike uncertainty. With the election in mind, that perhaps means a welcome lessening of uncertainties once the election is decided. On the economic front, continued progress with containing the pandemic will help to set the stage for a more optimistic future and an expectation of a return to a more normal prognosis. This long-term optimism and faith in all of us to make rational decisions is responsible for the seemingly irrational exuberance of the markets since the market’s bottom back in late March and will be instrumental in guiding market participants as we look to the future. All that said though, we’re likely to continue to see volatility in the near term as election and economic concerns are weighed by investors.
On a personal note, it is certainly difficult not to become a bit depressed listening to the candidates and their most vocal party members relentlessly attack each other. Sure, there are problems and some serious issues to deal with – there always are. Regardless, America is still the greatest country in the world. We don’t want to let all of the rhetoric and political noise discourage us into thinking things are so bad that the country is falling apart. It certainly isn’t – just ask the almost one million people who immigrate here each and every year.
Since 1776 our nation has been a triumph for optimists. Our Union has held through the toughest of times, and we have the freest nation on earth. On the eve of this election, I remain bullish on America, willing to believe that this next century will be as great as the last. We have the right to vote, to assemble, to run for office, and to associate freely. These freedoms of democracy are something many people in the world can only dream of.
I would like to thank you once again for continuing to place your trust in our company. Please let me know if you need anything.
Optimistically yours,
Eric Wylie