The Shape of Our Economic Recovery
Jay Pluimer, AIF® CIMA® Thursday, 10 September 2020
Our post-coronavirus economic recovery is dependent on many factors. We can look at the possible outcomes in three shapes. The first outcome, the V shape, a sharp drop, like the one we saw in March and April of this year, and equally sharp recovery is unlikely. Too much time has passed since the initial downturn for that to be the case. The U shape view of the recovery is more realistic in that it predicts a longer timeline to come out of the recession but a stable and plotted course toward it. It is reliant upon another fiscal stimulus package to spark spending and consumer confidence. The W shape or "double-dip" recovery is the worst-case scenario for our economy and for all those living in the US. This would mean that the markets and employment numbers take another deep dive before we see any type of long term and sustained recovery.
While less likely than the U shape model, the W shape recovery could come to fruition in the case of a substantial uptick in global coronavirus cases, international unrest, or a contested presidential election. If we work together as a society we can steer our course on the U shaped model and slowly but surely regain our footing.
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About the Author
Jay Pluimer, AIF® CIMA®
Jay Pluimer brings over 25 years of experience working with Investment Committees and individual investors to Flourish Wealth Management. He has built a career focused on investment research, client conversations about investments, and building diversified portfolios to help clients accomplish their goals. As Director of Investments, Jay is passionate about the opportunity to deliver individualized investment solutions for our clients that help align their resources and goals.