The Vaccine, Your Investment Account and Warren Buffett

It’s hard to argue that the COVID-19 virus does not continue to be public enemy number one, despite our progress. The varying degrees of openness in widely populated states will soon provide definitive answers as to whether we are taking the plunge or not. By all accounts, the trend is very favorable as measured by the reaction of the financial markets. Since it is not for this writer to influence the vaccine debate, I will simply quote the experts. The Centers for Disease Control (CDC) reports that as of 4/15/21, only 1 in 13,000 fully vaccinated Americans contracted the virus after receiving all of their vaccines. On the other hand, side effects have been experienced by a small handful of millions of people who have been vaccinated. The calculations are incredibly in favor of the vaccine, but this is America, so your choice will be honored anyway. Those who aspire to a sustainable return to normalcy – socially, financially and economically will get a vaccine as soon as possible according to experts in each of these fields.

The real debate seems to be more about the timing, not the ultimate success or failure of our battle with the virus. First Trusts suggests that if everyone had taken all of the recommended precautions and had been vaccinated at the earliest opportunity, we would have achieved collective immunity on May 1. It didn’t happen, so it just moves the date further and increases the number of deaths. (now up to 579,000 and above).

The favorable downward trend in positive cases and deaths continues to provide an improving environment for investment opportunities. Despite the multitude of things some might perceive as negative, Naira Malik – Chief Investment Officer and Head of Global Equities at Nuveen Investments continues his optimistic outlook. His team believes that the S&P 500 companies will increase their profits by 25 to 30% on average this year. This is moderately above the consensus for the financial research industry, but it looks extremely good! Their growth projections would put our level of economic output on track to reach pre-pandemic levels in early 2022. Translation: If you’re patient and ignore short-term volatility, your investment account has a lot to do with it. wait over the next few months.

On May 1st, I had the pleasure of attending the Berkshire Hathaway Annual Meeting. It was broadcast live on for 3.5 hours as Warren Buffett and Charlie Munger (aged 90 and 97) passed on wisdom, clichés and quotes for as long as anyone would listen to them. While there have been countless significant takeaways, I think two were particularly worth sharing. First, never bet against America. With a relatively short history and a lot of turmoil, our capitalist system has created more wealth than any other nation known to mankind. Perhaps more importantly, Buffett sees this trend continue for at least another century. Second, on the controversial global warming debate. Berkshire Hathaway is a major owner of Chevron shares – and would have no problem owning other similar fossil fuel companies. Buffett proclaimed “Extreme people on both sides are a little crazy. I would hate if all hydrocarbons were banned in three years. It wouldn’t work. And on the other hand, what happens will be adapted over time.

I might add, of the 47 publicly traded companies in which Berkshire Hathaway owns shares, Apple Inc. is by far their largest stake. Apple is the “fruit company” that made Forrest Gump, Lieutenant Dan and Steve Jobs rich. Buffett said that if an American had to choose to keep his car or his iPhone, he would get rid of the car! He argues that current Apple CEO Tim Cook is the best business executive he’s ever seen. For an introduction to life, economics, business management, and long-term investing, I highly recommend you Google their “top takeaway list” from their famous annual meeting.

The opinions expressed in this document are for general information only and are not intended to provide specific advice or recommendations to an individual. To determine which investment (s) might be right for you, consult your financial advisor before investing. The economic forecasts set forth in the presentation may not develop as expected and there can be no assurance that the strategies promoted will be successful. The referenced performances are historical and do not guarantee future results. Not all indices are managed and cannot be invested directly. Investing involves risks, including loss of capital.

RFG Advisory and its investment representatives do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied upon, for tax, legal or accounting advice. Please consult your own tax, legal and accounting professional for advice on these matters.

Visit us at Tommy Williams is a Professional CERTIFIED FINANCIAL PLANNER ™ with Williams Financial Advisors, LLC. Titles offered by representatives registered via Private Client Services, member of FINRA / SIPC. Advisory products and services offered by investment advisory representatives through RFG Advisory, a registered investment adviser. RFG Advisory, Williams Financial Advisors, LLC and Private Client Services are unaffiliated entities. The branch is located at 6425 Youree Drive, Suite 180, Shreveport, LA 71105.

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