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January 2021 Monthly Outlook - Welcome to 2021

January 2021 Monthly Outlook - Welcome to 2021

I hope you and your loved ones had a good holiday season and a Happy New Year.

I was looking forward to writing an upbeat outlook but the events of the last few days make that harder to do, and make me think of this quote: “I can calculate the motions of the heavenly bodies, but not the madness of people.” - Isaac Newton

I had high hopes that the incoming administration and Congress could find a way to compromise and work on a bipartisan basis to get Covid under control and restore our economy.  My hopes were dashed this weekend as numerous Senators and dozens of House Republicans have decided, mostly for their own political ambitions, to contest the Electoral College result that Biden won the election.  If that wasn’t bad enough, just yesterday President Trump was caught on tape essentially asking the Secretary of State of Georgia to “find” enough votes to flip Georgia from Biden and threatening criminal charges if he didn’t comply.

Both the action by members of Congress and the President only serve to further divide the country and risk undermining the most important thing the US has  - the rule of law and the Constitution. I’m not being political here – almost half the country supported President Trump.  But there were multiple recounts and audits in contested states, dozens of court cases and ample time for corrections if any were found.  The results didn’t change and have now been certified – it’s time to move on for the good of the country.

The real risk is that the continued polarization in Washington will prevent the incoming administration from being able to address several real critical issues affecting all Americans.  First and foremost is dealing with Covid-19 and re-energizing the economy.

Since Thanksgiving we have seen an explosion of cases, hospitalizations and deaths. This is due to increased travel and gatherings around in the holidays.  This trend likely continues for a least two more months as air travel over Christmas and New Year’s actually hit the highest levels since March 2020.  This has led to a reversal of the positive trend in the economy reopening and people going back to work.

The latest stimulus package that passed just after Christmas will help but it is only a bridge to hopefully keep the economy and people afloat until the vaccines are more widely distributed and actually given to people.  The rollout of the two approved vaccines has been slow due to the technical requirements of the vaccines.  But it has also been impacted by a lack of compliance by people who are eligible to receive the vaccine.  To date, some 40% of frontline workers who could have received the vaccine have refused to take it. That’s hard to explain.

Couple the surge in the virus with the slow roll out of the vaccines means we probably are dealing with a slower economy in early 2021 than previously anticipated and hoped for.  The charts below show the impact on the job market, which shows a declining level of job growth while long-term unemployment (greater than 27 weeks) at an extremely elevated level.




For the financial markets, 2021 begins with stock market indexes at all-time highs.  That is actually a concern for me.  Stocks are priced for perfection –  a smooth transition in Washington, effective rollout of vaccines, economic reopening, no international events.  At these levels, it will not take much to start a sell off.  I don’t expect anything as dramatic as we saw last March but a 10% - 20% correction is not out of the question.

I expect volatility to be high in January with the post-holiday surge in Covid, and the Georgia Senate election on January 5th followed by the inauguration on January 20th.  I do expect the first quarter to be a challenge both economically and on the investment front but remain hopeful that by the second quarter the vaccine rollout will be in full swing and the economy will be back to growing. 

We remain balanced in your investment portfolios allowing us to minimize the effect of any pullbacks while being positioned to take advantage of opportunities that arise.


We appreciate your confidence in us and will do our very best to help navigate this new year and whatever it brings.


January Calendar of Events   (comments and additions for future months are always welcome)

  • January is National Blood Donation Month.  Let’s all give a pint to help another.


January   5th                    My granddaughter Isys turns 15.  I must be getting old.

January 10th                    My wife Eloise’s birthday.   

January 15th                    11th anniversary of my independent practice – thank you to all my great clients.

January 18th                    Martin Luther King Day.  Let’s pray for more racial tolerance and understanding.

January 20th                     Inauguration Day


Best regards,




Sources: CNBC, JPM Asset Management



Although information herein has been obtained from sources deemed reliable, its accuracy and completeness are not asserted. All opinions and estimates included in this report constitute the judgment of the financial advisor as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.


Investing involves risk and you may incur a profit or a loss. Diversification does not ensure a profit or ensure against a loss. There is no assurance that any investment strategy will be successful.  Past performance is no assurance of future results.


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