13 Topics Investors Should Ask Their Advisors About Today

North American markets today, viewed several hours before opening, appear set to start on a positive note with major indicators in the green at time of writing. They are driven by promising vaccine news, though TV shots of trucks transporting vaccines counterpoint disturbingly with fact boxes on the side of the television screen showing surging numbers of deaths and cases.

Reports of a pandemic relief package apparently to be introduced today are also cheering the market. Whether both Houses of Congress will pass the plan as crafted remains to be seen, though it has the endorsement of outgoing President Donald Trump and there is no doubt about the urgency.

European markets are open at time of writing and firmly in the green. spurred on by vaccine hopes and by yet another extension in the divorce settlement talks between the United Kingdom and the European Union as they continue attempting to reach a trade agreement. That follows the earlier plunge into red by these indicators with Prime Minister Boris Johnson’s statement that there is a ‘strong possibility that the United Kingdom will not be able to craft a post-divorce trade settlement with the European Union”.

This has enormous implications for British exports and therefore for jobs and investments, since approximately half of all British exports go to Europe.

This week will not have the frantic action of last week, but several reports will provide different views of the effects of the pandemic and I will discuss some of them later. Rite Aid Corp. and FedEx Corp. are expected to report on Thursday while Carnival Corporation is expected to report on Friday.

This week also starts the move to the yearend, and few have expressed regrets.

Still, several forces are converging to change some traditional expectations and outlooks and they will affect some investors’ portfolios to some degree.

Normally at this time of year, the market conversation turns to hopes for a Santa Claus rally – a steady increase in the stock market starting at approximately mid-month in December and extending to the start of trading in January. The rally is usually driven by tax planning, a general feeling of Christmas cheer and (in previous years at least) Christmas bonuses. Whether the cynical belief by some observers that decreased trading by large institutional investors who have booked holidays has a material effect is difficult to assess. However, this year’s Santa Claus rally has effectively happened already, according to Jay Nash, Senior Vice president of National Bank in London.  “It’s hard to believe that investors would expect more than they have already received,” Nash says. “November was a massive ‘Santa Claus ‘rally”.

That being the case, Nash says that he is not anticipating a further rally and that the coming weeks could be flat and calm.

Before or after the Santa Claus outfits, standups and posters are put away, heart-to-heart conversations between investors and their advisors may have become more important than ever and the list of topics has expanded hugely.

They include:

  • The push-pull between optimistic vaccine news and the daily round of COVID19 case numbers
  • Whether the sky-high IPO prices of companies like DoorDash and AirBnb and be sustained
  • Where the investor is worried about a coming pink slip, the implications for investment liquidity
  • Where the investor has already been fired, laid off or furloughed, whether some investments need to be targeted for liquidation if he or she does not find suitable employment quickly
  • The likelihood of continuing volatility in the New Year
  • The potential investment impact of outgoing President Donald Trump’s apparent plan to remain on the scene even after President-elect Joe Biden officially takes over in January
  • The partial shift from growth investing to value investing
  • The likelihood of low interest rates until at least 2023 and therefore the relegation of bonds and bank certificates to a proxy for emergency bank accounts and reduction of portfolio volatility
  • The high valuations on tech stocks
  • The continued effect of work-from-home policies in terms of investment choices such as cloud; not all homebound employees will return to their offices when real recovery finally arrives
  • Whether beaten-down equities such as some retail and entertainment stocks can turn around in the New Year; not all victims of the pandemic are going to resume pre-pandemic valuations
  • The question of whether retail giants such as Costco can sustain pandemic-related boosts in sales
  • The impact of continued low oil prices

Related: Investors Should Start Having Meaningful Conversations With Their Financial Advisors About the Market in 2021