CHICOPEE, Mass. (WWLP) – Most economists expect sizable growth in 2021, thanks in part to the government stimulus, and also new leadership in Washington.
Your savings account and investments in CDs will likely underperform for the foreseeable future. That’s because interest rates will remain low. But financial planner Mark Teed of Raymond James said the stock market will do well over the next two years.
Teed explained, “I think if you’re sitting in a savings account and you’re young, you should shift that money to the stock market for the next few years.”
The pandemic tanked the economy. But now that two COVID-19 vaccines are being distributed, investors are feeling more confident on Wall Street.
Don: Does it matter if there’s a Democrat in office or a Republican in office at this point, or is the pandemic playing a bigger role in all of this?
Mark Teed: I think this year it’s all about the stimulus and the pandemic.
But even with that said, Teed points out that studies show the markets tend to do better under Democratic leadership.
In fact, he said the best stock market performances were under former President Barack Obama, before that Bill Clinton, followed by Republican President Ronald Reagan in the ’80s. Small businesses were hit particularly hard by the pandemic.
In Massachusetts, total small business revenue dropped by 44-percent compared to this time last year, according researchers at Opportunity Insights.
“I think they’re going to find that it’s a very receptive time for small business because everybody in America wants small businesses to get back on their feet,” Teed said.
Financial experts recommend being patient, likening the recovery to the first leg of a triathlon. The pace may be slow right now. But soon, by spring, momentum will build.
It’s important to note that before you make any major changes to your financial portfolio, you should consult your financial advisor.