Volume 92 No. 6 - June 2021
Life sometimes brings us trauma. What keeps us going as a global society is humans’ collective and individual ability to overcome obstacles and learn from tough times. As of this writing, over 116 million Americans have been vaccinated against COVID-19—nearly 45% of all adults in the US. The seven-day moving average of daily deaths has fallen to about 600, down from its peak exceeding 3,400 in mid-January. We have made progress and the pandemic is nearing its end.
While it is human nature to reflect on moving toward the end to this suffering, we also seek some lesson, some value with which we can emerge into this new normal, whatever that now-clichéd term actually represents.
What have we learned during this year-plus of pandemic times? How have we changed? And, what does it mean for our financial lives and our overall lives in the future?
Vulnerability: Part of the Human Condition
Humans need each other and we have lived together in communities for thousands of years. There’s good reason for it too. One study, published in PLOS Medicine in 2010, found that social relationships improved people’s odds of survival by 50%.
One of the pandemic’s lasting lessons will be the value of connecting with others, especially when we could not. Social distancing, quarantining and living behind facemasks provided real-life insights into what happens when we are forced to be alone and locked away from our friends and loved ones during tough times.
Technology Does Not Mean Invincibility
Societies have faced plagues and pandemics for as long as there have been societies, and, probably humans. The Spanish Flu Pandemic of 1918, cholera, yellow fever, plague. Science has achieved great advances in the century since the Spanish Flu pandemic ravaged the world and killed some 500 million people.
However, all the science, technology, and advances in protection still were not enough to stop the onslaught of the COVID-19 pandemic from spreading into communities and homes worldwide last year. From its first recorded death around January 10, 2020, to nearly 5,000 global deaths two months later, to the 3.38 million lives lost as of mid-May 2021, the pandemic spread across regions, countries and cities despite the preventative measures they established.
Medicine: Quick, Effective Vaccines
Much like NASA’s moonshot in the 1960’s accelerated scientific discoveries, the pandemic hastened the achievement of years of medical progress within just a few months. The use of telehealth expanded into mental health. Medical appointments moved into the realm of video chats.
The vaccine development process rocketed ahead in a grand race to deliver an end to the very real suffering caused by the pandemic. In a process that had traditionally taken five to ten years, three vaccines received emergency use authorizations within a year to treat COVID-19 in the United States.
Two of those vaccines—Moderna and Pfizer/BioNTech—have become the world’s first vaccines to use mRNA science. Beyond helping us end the pandemic, the development of these mRNA vaccines also promises other medical breakthroughs that may come, like a universal flu vaccine or expanded cancer vaccines.
An Evolution of Work/Life Balance
The pandemic revealed new realities in the realm of what it means to be an employee and what a work relationship looks like. Corporate facetime moved to a computer screen. The boundaries between home and work blurred even further. People reclaimed the time they had once lost in cars when they were traveling to work.
The pandemic also opened up some real questions about how we choose where we live. Suddenly, that job in a big city might not have to mean a cramped apartment across town, if you can telecommute three, four, or even every day during the week.
Some workplace trends that emerged during the pandemic are likely to persist in its wake and aftermath. For example:
· Remote and remote-flexible work and digital meetings
· Accelerated adoption of AI solutions that may automate tasks and jobs
· The disappearance of some jobs and the emergence of new ones
Investing Has Changed Too
COVID has forever changed us and our world. The pandemic challenged us to redefine what we thought was true or false. It changed companies and the way we evaluate our investments. While the pandemic brought short-term changes, it is the long-term trends that will rise to importance in our lives.
Coming out of the pandemic, we have to adapt how we invest. We have to look at the long-term impacts that face companies, industries and society. Two key technologies come to mind:
5G: Mobile broadband technologies played a paramount role in keeping society going during the pandemic. From virtual meetings to virtual school to virtual doctor’s appointments, mobile broadband helped us connect when we could not meet face to face.
The pandemic strengthened society’s resolve to embrace technologies like 5G that will provide even faster, more reliable connections in the future. One recent study commissioned by Qualcomm found that 5G could pump more than $3.5 trillion and 22 million jobs into the global economy in 2035.
Power Grid: The sufficiency, reliability and security of the US power grid became increasingly important (and visible) as people logged into their classrooms and workplaces from their homes across the United States in 2020. Along with the pandemic’s obvious cultural shifts come the implications for the US power grid in the near future:
· Reliability, not just cost, may guide decisions on where and how to invest money into the grid.
· New technologies coming from geospatial information systems (GIS) and smart meters may revolutionize the grid’s current aging technology.
· Increased risks coming from climate change and cyberattacks mean more contingency planning will be needed.
· The electrification of the transportation fleet will require even more reliability and expanded ways of generating electricity.
As always, what makes a company, or industry, “good” for investment is never a constant, especially over time. As companies navigate short-term fads and long-term trends, it is often through a mixture of management’s skill as well as fortunate and opportune industry and market movements that companies survive and prosper. Sometimes, it is even just plain luck.
We continue to advise a buy-and-hold methodology, but in reality, that has always meant adopting a buy-hold-and-don’t-fall-asleep approach to your investments.
While the pandemic does not mean you should throw away an investment strategy that has served you well over the years and decades, it may mean that the time has come to look at how the pandemic has changed your investment goals, strategies and values just like it has changed our lives. As always, we remain ready to help you with your questions and concerns as we step out into a new post-pandemic normal.
Investment Counsel Inc. is a registered investment adviser. Information presented is for educational purposes only. It should not be considered specific investment advice, does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.