Your Most Asked Questions

January 2021 | Victoria Bogner, CFP®, CFA, AIF®

Back to Market Commentaries

The last quarter of 2020 is at a close and like a good movie, it reached some monumental moments of suspense and resolution.  At least three viable COVID-19 vaccines were announced, and I wager you know nurses or front-line workers who have already begun to receive them.  Now more than ever before, there’s a tangible reality where COVID is no longer the boogie man hiding around the next corner.

But I know a lot of questions remain.  Here are some of the top ones I’ve been asked and my thoughts that follow.

1. What could derail the economic recovery?

So far, increasing COVID cases and lockdowns are being countered by fiscal and monetary support until vaccines can be widely deployed.  That’s kept the economic recovery in specific areas of the market going like online retail, home improvement, technology, and biotech to name a few.  Lockdowns affect the areas of the economy that are still underwater and very much in recession: airlines, cruise lines, restaurants, and brick and mortar retail.  What would affect a recovery more broadly are lockdowns without government backstops.  At that point, job losses and bankruptcies would mount and create a downward spiral.

Remember that stimulus is a Band-Aid, not a long-term solution. The most effective path to a sustainable economic recovery is vaccines.   That drastically reduces the downside risk from COVID heading into next year.

2. Vaccines aren’t at the level they need to be yet. How will the stock market deal with rising infections before the anticipated vaccines are broadly deployed?

Economic growth and stock market performance are related, but you have to remember that the stock market is a forecaster.  It looks toward future possibilities more than the here-and-now.  From the stock market’s point of view, the anticipated vaccines have a higher economic impact than any short-term disruptions from rising cases or potential lockdowns. Not to get too nerdy, but technically speaking, asset prices (and therefore stock prices) are calculated by discounting the stream of future expected cash flows from that asset. Because interest rates are at record lows, those future cash flows have a higher impact relative to near term cash flows. The short term of what happens pre-vaccine isn’t enough to derail the strong activity that happens after the vaccines.

However, in the short term the stock market is made up of investors, most of which are irrational.  Emotions can move the market much more quickly than logic or calculations.  Short term volatility could be high, so remember to keep an eye on the horizon and don’t let emotion sweep you under.

3. Isn’t all of this stimulus going to cause runaway inflation?

Eventually yes, I believe it will.  But inflation isn’t something that happens overnight, and certainly not on the heels of a recession.  In broad strokes, inflation has three ingredients: anticipation, lack of supply, and pent-up demand.  Those three ingredients also vary across different sectors of the market.  In 2022, we may see a huge demand for travel, which would increase costs associated with that.  But it wouldn’t necessarily affect how much a loaf of bread costs.

Something easy to watch in terms of inflation is unemployment, which would need to be a lot lower than it is now. More people working means more money changing hands and more wage pressure on employers.  Until the unemployment rate is back to pre-2020 levels, I believe broad inflation will be kept in check.

4. I still have my cash on the sidelines and I missed the dip. Is now still a good time to invest it?

One of the most common mistakes I see investors make is mistaking market timing for investing.  Reaching your goals is not about trying to time the market.  It’s about putting your money to work in a way that helps you reach those goals. That said, with how bullish we are about 2021, we believe there’s plenty of runway for stocks to continue to rise.  If we do get short term market corrections, those are additional opportunities to add to your positions.  In the meantime, don’t try to time the market.  Invest according to your goals.

Are there still risks?  Of course, there always are.  But with vaccines, low interest rates, and more stimulus to come, 2021 has the potential rocket fuel to be an incredible year for market returns.



Disclaimers and Notes
The views are those of Victoria Bogner and should not be construed as investment advice.  All information is believed to be from reliable sources, however, we make no representation as to its completeness or accuracy.  All economic and performance information is historical and not indicative of future results. 

Securities offered through Cetera Advisor Networks LLC, Member FINRA/SIPC. Investment Advisory Services offered through Cetera Advisor Networks LLC and McDaniel Knutson Financial Partners.  Cetera is under separate ownership than any other named entity. All information provided in this e-mail has been prepared from sources believed to be reliable, but is not guaranteed by Cetera Advisor Networks and/or McDaniel Knutson and is not a complete summary or statement of all available data necessary for making an investment decision. All information provided is for informational purposes only and does not constitute a recommendation.

Investors cannot invest directly in indexes. However, indexes are accurate reflections of the performance of individual asset classes shown. Dollar Cost Averaging does not assure a profit and does not protect against loss in a declining market. Such a plan involves continuous investment in securities regardless of fluctuating price levels of such securities. Investors should consider their financial ability to continue their purchases through periods of falling prices, when the value of their investments may be declining.

 *Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.


Disclaimers and Notes

Registered Representatives offering securities and advisory services through Cetera Advisor Networks LLC, member FINRA/SIPC, a broker/dealer and Registered Investment Advisor. Advisory services also offered through Affinity Financial Advisors, a Registered Investment Advisor, operating as McDaniel Knutson Financial Partners. Cetera is under separate ownership from any other named entity.

Check the background of your financial professional on FINRA’s BrokerCheck.

Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into accounts the effects of inflation and the fees and expenses associated with investing. The Volatility Index, or “VIX”, is a real-time market index that represents the market’s expectation of 30-day forward-looking volatility. Derived from the price inputs of the S&P 500 index options, it provides a measure of market risk and investors’ sentiments.

The views stated in this letter are not necessarily the opinion of Cetera Advisor Networks LLC and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change with or without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

Individuals affiliated with this broker/dealer firm are either Registered Representatives who offer only brokerage services and receive transaction-based compensation (commissions), Investment Adviser Representatives who offer only investment advisory services and receive fees based on assets, or both Registered Representatives and Investment Adviser Representatives, who can offer both types of services.

This is published for residents of the United States only. Registered Representatives of Cetera Advisor Networks LLC may only conduct business with residents of the states and/or jurisdictions in which they are properly registered. Not all of the products and services referenced on this site may be available in every state and through every representative listed. For additional information please contact the representative(s) listed on the site, visit the Cetera Advisor Networks LLC site at
We are Insurance licensed in AR, AZ, CA, CO, FL, IA, IL, KS, KY, LA, MD, MI, MN, MO, ND, NE, NY, OH, OK, OR, PA, SC, SD, TX, VA, WI, WY. CA Insurance License# 0G81128.

NOTICE: The information contained in this electronic message is confidential and intended only for certain recipients. If you are not an intended recipient, you are hereby notified that any disclosure, reproduction, distribution or other use of this communication and any attachments is strictly prohibited. If you have received this communication in error, please notify the sender by reply transmission and delete the message without copying or disclosing it.

© 2020-2022 Affinity Financial Advisors, operating as McDaniel Knutson Financial Partners.

Client Relationship Summary BrokerCheck Logo