Nothing is worse for your investments and the stock market than uncertainty. Last Friday, the markets bled as news of the new Covid variant broke out, causing investors to worry. And on Monday, Fed chair Jerome Powell said he believes the omicron variant, as well as a recent increase in covid infections, pose a threat to the economy.
He said, “Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply chain disruptions.” Have concerns about the new virus reduced your willingness to work?
Powell also commented on inflation, saying it’s difficult to predict how long it will last but likely well into the new year. He noted that many experts, including those at the Fed, think that inflation will fall “significantly” over the next year as supply chains recover.
President Joe Biden also delivered comments related to the new variant on Monday. He said he doesn’t expect additional travel restrictions or another lockdown, sending airline stocks higher. However, if the new variant continues to spread, more travel restrictions could be imposed. Last week, Biden announced the US would restrict travel from South Africa and seven other countries.
With all the uncertainty, some investors are trimming their portfolios. How’s your portfolio doing?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.