Top Five Global Investment Risks In 2021 | Charles Schwab

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The top five global risks for investors in 2021 are all surprises to the consensus view:

  • Problems with the vaccine rollout,
  • Geopolitical and trade tensions do not subside,
  • Fiscal and/or monetary policy tightens,
  • A “zombie” economy, and
  • Interest rate/dollar shock.

History demonstrates that the biggest financial risks in a typical year aren’t usually from out of left field (although a black swan did occur in 2020 with the COVID-19 outbreak). Rather, they are often hiding in plain sight.

Risk appears when there is a very high degree of confidence among market participants in a specific outcome that doesn’t pan out. So, by identifying the unexpected, here are the top five downside global risks for investors in 2021. To read more: https://www.schwab.com/resource-center/insights/content/top-five-global-investment-risks-2021?cmp=em-QYD

Be prepared

Whether or not these particular risks come to pass, a new year almost always brings surprises of one form or another. Having a well-balanced, diversified portfolio and being prepared with a plan in the event of an unexpected outcome are keys to successful investing.

References:

  1. https://www.schwab.com/resource-center/insights/content/top-five-global-investment-risks-2021?cmp=em-QYD

COVID-19 and PTSD

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The coronavirus (COVID-19) pandemic and the economic hardships it has created will take a significant emotional as well as a physical toll on Americans in the coming months and years, according to the Centers for Disease Control and Prevention (CDC).  It is not uncommon to experience some level of stress reactions or PTSD after a trauma or event such as the COVID-19 pandemic. Many people can feel detached or down, have sleep problems like nightmares, or have flashbacks where they feel the event is happening again.

During the COVID-19 pandemic, you may experience stress, anxiety, fear, sadness and loneliness. And mental health disorders, including anxiety and depression, can worsen.  Surveys show a major increase in the number of U.S. adults who report symptoms of stress, anxiety and depression during the pandemic, compared with surveys before the pandemic, according to the Mayo Clinic. Some people have increased their use of alcohol or drugs, thinking that can help them cope with their fears about the pandemic. In reality, using these substances can worsen anxiety and depression.

What is PTSD?

U.S. Veterans Administration (VA) defines PTSD (posttraumatic stress disorder) as a mental health problem that some people develop after experiencing or witnessing a life-threatening event, like combat, a pandemic or natural disaster, a car accident, or sexual assault.  Symptoms may include flashbacks, nightmares and severe anxiety, as well as uncontrollable thoughts about the event.

Most people who go through traumatic events may have temporary difficulty adjusting and coping, but with time and good self-care, they usually get better. If the symptoms get worse, last for months or even years, and interfere with your day-to-day functioning, you may have PTSD.

It’s normal to have upsetting memories, feel on edge, or have trouble sleeping after this type of event, according to VA. At first, it may be hard to do normal daily activities, like go to work, go to school, or spend time with people you care about. But most people start to feel better after a few weeks or months.

If it’s been longer than a few months and you’re still having symptoms, you may have PTSD.  For some people, PTSD symptoms may start later on, or they may come and go over time.

How people respond to these normal reactions may make the difference between long-lasting symptoms and short-lived problems.  There are treatments and strategies that work for PTSD that can help with the stress, grief, and anxiety that many people are feeling. If you have PTSD, or have symptoms that last longer than a few months after the traumatic event is over, your best chance of getting better is by working with a mental health or medical provider.

During this kind of event, you may not have any control over what’s happening, and you may feel very afraid. Anyone who has gone through something like this can develop PTSD.

Self-care strategies

Self-care strategies are good for your mental and physical health and can help you take charge of your life. Take care of your body and your mind and connect with others to benefit your mental health.  To reduce stress triggers:

  • Keep your regular routine. Maintaining a regular schedule is important to your mental health. In addition to sticking to a regular bedtime routine, keep consistent times for meals, bathing and getting dressed, work or study schedules, and exercise. Also set aside time for activities you enjoy. This predictability can make you feel more in control.
  • Limit exposure to news media. Constant news about COVID-19 from all types of media can heighten fears about the disease. Limit social media that may expose you to rumors and false information. Also limit reading, hearing or watching other news, but keep up to date on national and local recommendations. Look for reliable sources, such as the U.S. Centers for Disease Control and Prevention (CDC) and the World Health Organization (WHO).
  • Stay busy. A distraction can get you away from the cycle of negative thoughts that feed anxiety and depression. Enjoy hobbies that you can do at home, identify a new project or clean out that closet you promised you’d get to. Doing something positive to manage anxiety is a healthy coping strategy.
  • Focus on positive thoughts. Choose to focus on the positive things in your life, instead of dwelling on how bad you feel. Consider starting each day by listing things you are thankful for. Maintain a sense of hope, work to accept changes as they occur and try to keep problems in perspective.
  • Use your moral compass or spiritual life for support. If you draw strength from a belief system, it can bring you comfort during difficult times.
  • Set priorities. Don’t become overwhelmed by creating a life-changing list of things to achieve while you’re home. Set reasonable goals each day and outline steps you can take to reach those goals. Give yourself credit for every step in the right direction, no matter how small. And recognize that some days will be better than others.
  • Make connections. If you need to stay at home and distance yourself from others, avoid social isolation. Find time each day to make virtual connections by email, texts, phone, or FaceTime or similar apps. If you’re working remotely from home, ask your co-workers how they’re doing and share coping tips. Enjoy virtual socializing and talking to those in your home.

The COVID-19 pandemic can take a mental and emotional toll on anyone.  If you are struggling mentally and emotionally during these difficult times, there are effective treatments for those struggling mentally and emotionally that can help you live a happier, more productive life.

References:

  1. https://www.mayoclinic.org/diseases-conditions/coronavirus/in-depth/mental-health-covid-19/art-20482731
  2. https://www.ptsd.va.gov/gethelp/selfhelp_coping.asp
  3. https://www.mayoclinic.org/diseases-conditions/post-traumatic-stress-disorder/symptoms-causes/syc-20355967
  4. https://www.ptsd.va.gov/publications/print/understandingptsd_booklet.pdf

Federal Stimulus and Relief Package Approved

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Congress has finally finalized the details on a stimulus package with a catchall measure to fund all federal spending for the remainder of the fiscal year ending in September 2021. This was accomplished after months of political gamesmanship between the two parties and Congress was at the peak of its dysfunction at the expense and added suffering of the American public.

Both chambers approved the measure and President Trump was expected to sign it. Final votes on the spending package were expected to approve it and clear it for Mr. Trump’s signature, but had yet to be scheduled. Once approved and signed, the emergency recovery plan would:

  • Provide funds for vaccine distribution.
  • Send direct payments of $600 to many Americans
  • Provide enhanced federal unemployment benefit payments of $300 per week until early spring
  • Provide food and rental assistance to millions of Americans, and
  • Provide hundreds of billions of dollars of relief to prop up small businesses, schools and other institutions struggling amid the pandemic.

Without action by Congress before the end of the calendar year, two programs designed to expand and enhance unemployment benefits are set to expire in the coming days, leaving about 12 million Americans without federal support. A number of other benefits are set to expire at the end of the year.

“We can finally report what our nation has needed to hear for a very long time,” Senator Mitch McConnell, Republican of Kentucky and the majority leader, said Sunday night. “More help is on the way.”

Both chambers approved the measure on Sunday night, and President Trump was expected to sign it before midnight. Final votes on the spending package were expected as early as Monday to approve it and clear it for Mr. Trump’s signature, but had yet to be scheduled.

References:

  1. https://www.nytimes.com/2020/12/19/us/politics/stimulus-deal-congress.html?referringSource=articleShare

African Americans Disproportionately Dying

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African Americans are dying from the coronavirus at almost 3 times the rate of their white counterparts.

Black and Hispanic Americans were disproportionately more likely to die of COVID-19 during the spring and summer months indicating that the coronavirus’s toll is falling most heavily on underserved and minority communities, according to the Centers for Disease Control and Prevention (CDC).

When you consider that African Americans represent 12.5 percent of the population, but account for almost 23 percent of all coronavirus deaths, the COVID-19 pandemic is disproportionately decimating the black working class communities across the country.

Coronavirus has become the third leading cause of death of citizens in the United States in calendar year 2020. The virus has killed more than 300,000 since arriving on U.S. shores, making it a leading cause of death after heart disease and cancer.

In 2018, the 10 leading causes of death for all Americans (heart disease, cancer, unintentional injuries, chronic lower respiratory diseases, stroke, Alzheimer disease, diabetes, influenza and pneumonia, kidney disease, and suicide) remained the same as in 2017. The 10 leading causes accounted for 73.8% of all deaths in the United States in 2018.

The Centers for Disease Control and Prevention (CDC) maintains a provisional death count related to COVID-19. The deaths counted in that data are well below those compiled from the state and county levels because the provisional count is based on death certificates that may take weeks to filter up to the federal agency.

With respect to controlling the pandemic, Martin Luther King Jr. once declared “Whatever affects one directly, affects all indirectly.” This is definitely true for epidemiology and controlling the pandemic. To protect the health of all us, we must insure the health of the most vulnerable among us.

How to control COVID-19 is not a mystery — it requires wearing masks, social physical distancing of 6 feet, frequent washing of hands, widespread contact tracing and COVID testing and widespread vaccination. However, these efforts to combat the pandemic require people to trust the science and those behind the public health measures.

In the nationwide fight against the COVID-19 pandemic, well founded mistrust has developed over decades by African Americans of the government, public health officials and ‘the science’ can and has killed a disproportionate share of working class Blacks and other people of color.

References:

  1. https://www.cdc.gov/nchs/nvss/vsrr/covid19/
  2. https://www.usatoday.com/story/opinion/2020/09/09/covid-19-disproportionate-effect-african-americans-and-how-control-column/5679676002/
  3. https://www.cdc.gov/nchs/nvss/vsrr/covid19/tech_notes.htm

Masks Protect Those Around You

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COVID-19 spreads mainly from person to person through respiratory droplets. Respiratory droplets travel into the air when you cough, sneeze, talk, shout, or sing. These droplets can then land in the mouths or noses of people who are near you or they may breathe these droplets in.

Masks are a simple barrier to help prevent your respiratory droplets from reaching others. Studies show that masks reduce the spray of droplets when worn over the nose and mouth.

woman wearing face covering, with a detail showing how the cloth barrier helps to contain respiratory droplets that she exhales

You should wear a mask, even if you do not feel sick. This is because several studies have found that people with COVID-19 who never develop symptoms (asymptomatic) and those who are not yet showing symptoms (pre-symptomatic) can still spread the virus to other people. The main function of wearing a mask is to protect those around you, in case you are infected but not showing symptoms.

It is especially important to wear a mask when you are unable to stay at least 6 feet apart from others since COVID-19 spreads mainly among people who are in close contact with one another (within about 6 feet).

Your mask offers some protection to you

A cloth mask also offers some protection to you too. How well it protects you from breathing in the virus likely depends on the fabrics used and how your mask is made (e.g. the type of fabric, the number of layers of fabric, how well the mask fits). CDC is currently studying these factors.

Who should or should not wear a mask

CDC guidance is that everyone 2 years of age and older should wear a mask in public settings and when they are around people who do not live in their household.  However, according to CDC, masks should not be worn by:

  • Children younger than 2 years old
  • Anyone who has trouble breathing
  • Anyone who is unconscious, incapacitated or otherwise unable to remove the mask without assistance
  • Wearing masks may be difficult for some people with sensory, cognitive, or behavioral issues. If they are unable to wear a mask properly or cannot tolerate a mask, they should not wear one,

https://youtu.be/dSvff0QljHQ

Key Takeaways:

  • People age 2 and older should wear masks in public settings and when around people who don’t live in their household.
  • Masks offer some protection to you and are also meant to protect those around you, in case you are unknowingly infected with the virus that causes COVID-19.
  • A mask is NOT a substitute for social distancing. Masks should still be worn in addition to staying at least 6 feet apart.
  • Wash your hands with soap and water for at least 20 seconds or use hand sanitizer with at least 60% alcohol after touching or removing your mask.
  • Postponing holiday travel & staying home is the best way to protect yourself & others from COVID19. If you decide to travel internationally, check out CDC’s testing recommendations to help make travel safer. 
  • Masks may not be necessary when you are outside by yourself away from others, or with other people who live in your household. However, some localities may have mask mandates while out in public and these mandates should always be followed.

References:

  1. https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/cloth-face-cover-guidance.html

Purpose and Direction

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What is your purpose and how do you want to change and affect the world.

Soon after the completion of Disney World in Florida, someone said, “Isn’t it too bad that Walt Disney didn’t live to see this!” Mike Vance, creative director of Disney Studios, replied, “He did see it – that’s why it’s here.”

“Efforts and courage are not enough without purpose and direction.” — John F. Kennedy

When you have or know your life’s purpose, your life becomes filled with direction and meaning.  You will have the right direction and destination to set you forward.  Your purpose gives you a reason for getting up and showing up. If you don’t get up and show up, something important won’t be accomplished.

Finding Purpose and Direction

Unfortunately, it is a common for you to question where your life is going. If you’re constantly asking yourself where your choices are taking you and if you’re making the right ones, you’re not alone, according to Maxie McCoy, author of You’re Not Lost: An Inspired Action Plan for Finding Your Own Way. But feeling lost is not unusual.  Either you got to where you always said you wanted to be, only to realize you don’t want that any more. Or, you’ve never known where you’re going.

Finding and living our purpose is key to having a meaningful, fulfilling life. And, a strong sense of purpose can have a powerful positive effect. When you have a sense of purpose, you never get up in the morning wondering what you’re going to do with yourself. When you’re ‘in purpose’ — that is, engaged with and working towards your purpose — life becomes easier, less complicated, and stressful. You become more focused, like an arrow flying towards its target, and your mind feels strong, with less space for negativity to seep in.

When you don’t have a sense of purpose in your life, it makes you more vulnerable to boredom, anxiety, depression and falling into a rut, according to Psychology Today. To get yourself out of a rut, you should think small, because small is manageable. Small actions let you test and “dry run” how the action might make you might feel. Small steps are better than unyielding and misguided big ones. And over time, they allow you to get closer and closer to a life that feels full of purpose and direction. So it is important to ask yourself: What’s the absolute smallest thing I can do right now to feel more of this?

“When a man does not know what harbor he is making for, no wind is the right wind.” — Seneca

Victor Frankl’s famous book, Man’s Search for Meaning, in which he describes his experiences in concentration camps during the Second World War. Frankl observed that the inmates who were most likely to survive were those who felt they had a goal or purpose. Frankl himself spent a lot of time trying to reconstruct a manuscript he had lost on his journey to the camp — his life’s work. Others held on to a vision of their future — seeing their loved ones again or a major task to complete once they were free.

Aligning ourselves to a purpose often makes us less self-centered. We feel a part of something bigger, something outside ourselves, and this makes us less focused on our own worries and anxieties. Our own problems seem less significant, and we spend less time thinking about them, and so our sense of well-being increases.

“Having a purpose is the difference between making a living and making a life.” — Tom Thiss

Survival is the most basic level of purpose, common to all living things on this planet. It means the effort to meet basic physical needs for food, shelter, or to protect one’s survival in the face of others who threaten it.

The desire for purpose is one of the main reasons why people are attracted to religion. If you are a Christian, your purpose is clear: to worship God and Jesus Christ and attempt to live a virtuous, Christ-like life.

Personal Accumulative — attaining wealth, status and success: Many people in our individualistic and competitive modern societies derive their sense of purpose in these ways, according to Psychology Today. Encouraged by the consumerist ethos of our societies, their main purpose is to accumulate: to make money, to attract attention, to become famous, or rise to positions of status and power.

Purpose and hope are closely related. Working towards a goal implies that we feel that the goal is attainable, and that our lives will change for the better once we have reached it. It implies hope — depending on our type of purpose, hope for a better life for ourselves, a fairer and more just society, liberation from suffering and oppression for others, a healthier world, and so forth.

Having a sense of purpose is powerful. With a clear and concrete purpose that is greater than yourself, no ocean of difficulty is too great. Without a clear and concrete purpose, we rarely move beyond our current boundaries.

Vision and goals can provide you a sense of purpose and can help you see things and work towards things in the future.  It has been said that, “Vision that looks inward becomes duty. Vision that looks outward becomes purpose.”

References:

  1. https://www.psychologytoday.com/us/blog/out-the-darkness/201307/the-power-purpose
  2. https://www.goodhousekeeping.com/life/career/a25700487/how-to-find-purpose/
  3. https://personalexcellence.co/blog/why-have-a-life-purpose/
  4. https://www.mayoclinic.org/healthy-lifestyle/adult-health/in-depth/set-your-purpose-reach-your-goals/art-20269956
  5. http://rhapsodystrategies.com/live-life-on-purpose/

1st Generation Building Wealth

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“People want instant gratification, but regular practice is what strengthens your ability. It’s a muscle you have to build, the same as you do with exercise. It will get easier over time.” Andy Reed, PhD, Fidelity’s vice president for behavioral economics.

We all know that for financial security, you need to spend less than you earn, save more, invest and make smarter financial decisions over the long term.

To save effectively, you must establish a solid financial plan that requires understanding your current financial state , concrete goals, and regular and accurate tracking your behaviors and outcomes over time.

“People want instant gratification, but regular practice is what strengthens your ability. It’s a muscle you have to build, the same as you do with exercise. It will get easier over time,” says Andy Reed, PhD, Fidelity’s vice president for behavioral economics.

To read more, go to: https://www.fidelity.com/learning-center/personal-finance/2021-money-resolutions? fbclid=IwAR0nFHEKRYVVuXRKIPHhmBbvD4s5iovtbdS9MEt8WU0qxYh9YQYuVVWohzc&sf240961961=

References:

  1. https://www.fidelity.com/learning-center/personal-finance/2021-money-resolutions? fbclid=IwAR0nFHEKRYVVuXRKIPHhmBbvD4s5iovtbdS9MEt8WU0qxYh9YQYuVVWohzc&sf240961961=

Vaccination and Wearing Masks

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“Once enough people have some immunity, either because of previous infection or because of vaccination, the virus will have a hard time spreading through the community.” Consumer Reports

Researchers hope that Americans getting vaccination will be sufficient to end the pandemic once there is sufficient supply and enough pf the population gets vaccinated.

In trying to understand the readily available vaccine information and how it will affect the lives of Americans, Consumer Reports has reviewed government guidance and consulted with public health experts to provide insight to their readers about the vaccine candidates.

Vaccination equals two doses

Vaccines require two doses—an initial shot and a booster, taken several weeks later. Generally with a two-dose vaccine, it takes about two weeks from the second dose for a vaccine’s protection to fully kick in, according to Natalie Dean, PhD, an assistant professor of biostatistics specializing in infectious disease and vaccine development at the University of Florida.

Though two doses are necessary, the FDA’s analysis of the Pfizer vaccine indicates that people appear to be somewhat less likely to get COVID-19 within two weeks of receiving the first dose.

It’s unclear how long protection from that first dose may last. And the second dose is still required for full protection, to ensure a more durable immune response. 

Halting the virus transmission

It is not known definitely whether getting vaccinated will prevent you from spreading the coronavirus to others. Thus, preventive measures such as social distancing, washing hands, and wearing a mask will remain important even after you get vaccinated, according to the CDC.

More research is required before scientists can say exactly how many people need to be vaccinated to achieve “herd immunity “. It’s possible that with extremely effective vaccines showing 95 percent efficacy, we might hit the point where communities are protected by the time somewhere between 60 and 70 percent of people have been vaccinated, according to Kathleen Neuzil, MD, a professor of vaccinology and director of the Center for Vaccine Development and Global Health at the University of Maryland in Baltimore. 

It will be possible for vaccines, as long as Americans get vaccinated, to have a significant impact on ending this pandemic.

Severe allergic reactions

In the U.K., public health regulators have advised that anyone with a history of a severe, potentially life-threatening allergic reaction to a vaccine, medicine, or food should not receive the vaccine. Two healthcare workers were reported to have had severe allergic reactions after receiving the vaccine. Public health experts worry that the reports could frighten people with allergies and make them think they should avoid getting the vaccine.

From Pfizer’s vaccine trial results, there were no severe allergic reactions. Deliberately, the trials excluded people who had previously had severe allergic reactions to vaccines, a Pfizer scientist said during the advisory panel’s discussion.

The FDA plans to advise that people who are allergic to components of the vaccine should not get it, an agency scientist explained. The FDA’s earlier review of Pfizer’s trial data found slightly more potential minor allergic reactions in the group that received the vaccine than in the placebo group, but none of these were severe, and none occurred immediately after people received their doses of vaccine.

References:

  1. https://www.consumerreports.org/vaccines/your-questions-about-a-coronavirus-vaccine-answered/?EXKEY=YSOCIAL_FB&fbclid=IwAR2LW6PC_JSykJwyG-Kv9ozQkNvxH-1VnYmAby-MJIr8kSJfHm7UwtyH3k8

Vitamin D: Powerful Protection vs. Viruses

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A new study from Spain looked at 216 hospital patients with COVID-19 and found that 80 percent didn’t have adequate levels of vitamin D in their blood, according to Healthline.com.

Recent research discovered a correlation between vitamin D deficiency and a higher risk of COVID-19. Now, another new study has found the same — noting that more than 80 percent of people with COVID-19 didn’t have adequate levels of the “sunshine vitamin” in their blood.  “It looks like patients with a poor vitamin D status may have more severe COVID-19,” said Dr. Hans Konrad Biesalski, a professor at the University of Hohenheim who has evaluated vitamin D and COVID-19..

Vitamin D is a potent weapon against viruses and crucial for immune health — make sure you’re getting enough

There appears to be strong evidence that Vitamin D plays a critical role for your body’s immune system and can ward off respiratory infections. Vitamin D does not effect the viruses, but effects the way our immune system handles infections including viruses.

Boosting your immune system is one of the best things you can do because it is your body’s key defense when it comes to fighting a virus. Even if you are exposed to a virus and if your immune system is strong, you have a better chance of not getting sick.

A major 2017 study published in the British Medical Journal looked at vitamin D’s effectiveness against viral infections. Researchers analyzed 25 clinical trials that included 11,321 people. The data came from 14 countries, including the U.S., England, Japan, Australia, Canada, and Italy.

The study found that taking vitamin D supplements cuts in half the risk of respiratory infections caused by viruses.[1]

Many people recommend that people at high risk for COVID-19 — older adults, those with underlying conditions, and people in nursing homes — can be treated with vitamin D.  “Vitamin D treatment should be recommended in COVID-19 patients with low levels of vitamin D circulating in the blood since this approach might have beneficial effects in both the musculoskeletal and the immune system,” Hernández said in a statement.

Many Americans have a vitamin D deficiency

Vitamin D supplements should be considered one of the many tools that might help when conventional therapies are not enough. Research has found that vitamin D improves viral immunity by strengthening your mucus membranes.

Vitamin D is a key nutrient for your immune system. Once thought as the vitamin for strong bones, vitamin D actually does a lot more for your body — including support your immune system.

The coronavirus and other viruses get into your body through entry points that are covered with mucus membranes. They include your nose, mouth, eyelids, lungs, trachea (windpipe).

A lab study at the University of Illinois found that vitamin D helps mucus membranes provide a stronger barrier to viruses by increasing the antimicrobial compounds in them.

With coronavirus pandemic, researchers have not yet had time to fully test vitamin D directly against it. But they say there’s no reason to think that it would not work just as well against coronavirus as it does against the flu, colds, and other upper respiratory viruses.  “Very low vitamin D status has lots of negative consequences and this could be the case for COVID-19, but that’s not the same as saying that routine vitamin D supplementation will prevent severe infection,” he told Healthline.

  1. https://www.healthline.com/health-news/new-study-found-80-percent-of-covid-19-patients-were-vitamin-d-deficient
  2. https://www.bmj.com/content/356/bmj.i6583
  3. https://www.institutefornaturalhealing.com/2020/03/coronavirus-one-vitamin-may-be-the-key-to-stopping-it/
  4. https://www.bing.com/amp/s/www.cnet.com/google-amp/news/the-surprising-role-vitamin-d-plays-in-your-immune-health/