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When the Winds Change

For those of us in Arizona, now is the time we live here. Beautiful blue skies, warm weather, it really could not be better. However, if being biased, it does seem as if we have received significantly more wind this year. Not only do I see it with leaves blowing all around, but my family’s allergies also have certainly felt it.

As I have shared in the past, Francis enjoys old musicals and he is taking a liking to one of my favorite movies, Mary Poppins. Both he and I enjoy this movie and it has been our go-to the past few Friday nights. Watching it numerous times, I have been drawn to the use of wind. Mary arrives with the wind just as the other potential nannies are blown away. In the movie, the family needs more than just a nanny and Mary is the answer. When the wind changes directions Mary realizes it is time for her to move along as she has accomplished all the family needs.

Between the recent Arizona winds and my watching of a Disney classic, I honestly believe the winds are changing and there is light at the end of the tunnel. With a 3rd approved vaccine in the United States, more people are getting vaccinated, and more normalcy is on the horizon. Cases and hospitalizations are dropping and more businesses and schools are opening for in-person interactions. Dormant parts of the economy are opening.

While not back to pre-pandemic levels, the US economy has the potential to recover all the lost output for 2020 in a relatively short period of time. The consumer is doing their part as retail sales jumped significantly in January due to the stimulus package passed in December. Not only is the consumer spending, but they have saved over one trillion dollars since last year according to the Bureau of Economic Analytics. This level of additional savings could fuel huge spending as the restrictions begin to be lifted. Shortly, Congress is expected to pass an additional stimulus package which could provide even more money to the economy. Additionally, the Federal Reserve continues to provide unwavering support to the economy. Taken together, the economy has performed quite well which has helped provide continued support to the equity markets.

Just this morning, nonfarm payrolls were reported to have increased by 379,000 in February. The chart below shows a significant amount of hiring came in the ‘Leisure and hospitality’ sectors. This is good, it shows the economy is reopening.

Even with all the good information, there is worry the economy may start to overheat or grow too fast which would ultimately cause inflation. While a risk, this is something we continue to follow and will make any changes within the portfolios as needed.

As we continue through March and look towards the official beginning of spring, do not forget to plant the seeds you received last year. Additionally, if there is something we have discussed in the past, be it your estate plan or a review of your insurance, and it still needs to be completed, please let us know how we can help.

May we allow the winds of change to become the tailwind to a great spring and summer. Have a great weekend.


Chris Zeches, CFP®
Managing Partner