In the last few days, Johnson & Johnson’s vaccine study was paused after a volunteer got sick and Eli Lilly & Co.’s antibody study was halted enrollment over a safety concern. AstraZeneca Plc’s vaccine has been on hold since early September. Only Pfizer still holds the hope for a vaccine by year end. In the meantime, the virus is spreading like wildfire across the U.S.

World Bank Chief Economist Carmen Reinhart said the coronavirus pandemic is turning into a major economic crisis and warned of the possibility of a financial crisis emerging. “This did not start as a financial crisis but it is morphing into a major economic crisis, with very serious financial consequences”.

Future Wealth’s View

Just when we thought things would get better, the problems the vaccines have run into, provides us with a cautionary tale of how things could get worse before it gets better. And unfortunately, it appears to us, at Future Wealth, that we may have another year of mask wearing, don’t hug me or touch me, let’s pass on meeting next week etc., well into 2021. That means that the travel industry is toast, the entertainment industry will be reduced to Netflix (Disneyland and movie theaters will become distant memories), restaurant business will have to go completely open air (except the kitchen) and we will not even talk about the millions of square feet of office space that will be laid to waste.

If these signals are not enough to pare back on risk taking, then there is something fundamentally wrong with the way investors are looking at markets. It is always great to rejoice on making money on Tesla or Snowflake etc., but the reality is that it is not the recent wins that matter, but having enough to see us through our retirement years that really matters. If a major correction were to occur when this news of a repeat of 2020 in 2021 gets digested by the market, it will put most high risk portfolios in jeopardy.

It reminds me of the last time I opened a fortune cookie after a sumptuous dinner at a Chinese restaurant – “A hard head makes for a soft behind.”