Your funds: three reasons to feel good / bad in the market now | Economic news
3) The recovery could end sooner than expected, or there could be a relapse of COVID-19. There’s no denying pent-up demand as coronavirus shutdowns return to normal life, and it’s creating huge economic growth this summer, but how long the spending celebration lasts is a real question.
The economy entered the pandemic in a slow growth mode; If the spike in spending passes and the economy falls back to pre-pandemic growth levels, the market is likely to experience real and lasting disappointment. Additionally, any return of COVID or shutdown caused by the emergence of viral variants could end the recovery night overnight.
Turning things around, here are three reasons to be optimistic:
1) For years, there will be a part of the world in recovery mode. Indeed, the world has gone into pandemic mode at the same time, with each economy feeling the effects at roughly the same time, but that’s not how the recovery is going to work.
The United States and China came out of the pandemic first and Europe is moving forward, but many parts of the world are still in the grip of the pandemic. They will begin their recovery as the pent-up demand here is exhausted, creating global opportunities.
International diversification may be more profitable over the next decade than it has over the past 10 to 15 years.