Saturday, November 27, 2021

A Bridge Over Troubled Water?

Ask the CFP

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“The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic.” ~ Peter Drucker, 1909-2005, Founder of Modern Management by Objectives & Self-Control


Question: Is the most recent government stimulus deal expected to provide adequate economic support for the economy?  

Answer: It is thought by many that the passage of the recent stimulus bill will provide some support for the economy until next March when unemployment insurance expires. This will depend on the health and economic situation over the next several months.


Here’s a breakdown of the stimulus deal:  

Small Business Support: $284 billion of new funding for small business Paycheck Protection Program (PPP) loans with expanded eligibility for nonprofits. Specific support is said to be included for independent restaurants, but details are not yet clear. $20 billion is provided for targeted Emergency Injury Disaster Loan (EIDL) program small business grants. $15 billion is provided for live music venues and $9 billion is dedicated for Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs). 

Unemployment Support: Unemployment insurance enhancement of $300 per week is included for 11 weeks. Pandemic Unemployment Assistance (PUA) for self-employed and gig workers is also extended for 11 weeks. 

Individual Checks: $600 per individual and $600 per child with no limit on children. The same income phase out from the original CARES Act is included at $75,000. Adult dependents are reportedly excluded. An earlier proposal that would limit receipt of both checks and unemployment assistance is reportedly not included. 

Housing Assistance: $25 billion is provided for rental assistance and the eviction moratorium is extended (extension length currently unclear). 

Industry Support: $15 billion is reportedly provided for continued airline payroll support. Business meal deductibility is reportedly also included, with details not yet clear. 

State/Local Funding: $82 billion is provided for schools and colleges. $27 billion is targeted for state highway/transit/rail/airports. $22 billion provided for state healthcare funding. $7 billion for broadband connectivity and an Emergency Broadband Benefit to offset costs. States are further provided a 1-year extension to access the state Coronavirus Relief Fund established under the CARES Act ($150 billion). This will allow states to cover expenses incurred through December 2021. 

Miscellaneous: The overall $1.4 trillion government funding package includes research and development enhancements and an extension of clean energy tax credits.



Debate over whether lending programs will be restarted using the Treasury’s Exchange Stabilization Fund will likely spill over into 2021. 

The hope is for Janet Yellen and Federal Reserve Chairman Jerome Powell to find creative solutions for ongoing problems. Any effort to curtail the lending authority can be viewed as Congress stepping in and exerting oversight powers in an effort to push back on the Fed’s role in this year’s stimulus debate. We’ll be watching to see if lawmakers are willing to take further steps on fiscal matters.  

Your portfolio has likely been on a wild ride this past year along with the economy. Getting back to basics is a good way to approach the New Year and see if your portfolio has deviated from its intended target. Your goal isn’t to move every time the market does. Instead, it’s to make sound decisions based on your needs and expectations. Even in normal markets, regular maintenance via recalibrating, rebalancing, and realigning a portfolio is an art and a sciencebased on rules. 

The pandemic and its aftershocks highlight important issues and may help you identify outperformers and underperformers in your portfolio. Some tried-and-true standby investment basics may also continue to serve you well. It may be time to reconsider your liquidity needs over the short and intermediateterm. Look for a judicious approach when identifying what is a comfortable cash cushion. Market volatility like the pandemic can catch us off guard, but a rules-based rebalancing plan may better prepare us to turn turbulence into opportunity. Stay focused and plan accordingly for the New Year. 

The foregoing content is subject to change at any time without notice. Content provided herein is for informational purposes only. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. The opinions expressed are those of the writer as of December 22, 2020, but not necessarily those of Raymond James and Associates, and subject to change at any time. All information provided herein is for informational purposes only and is not intended to be, and should not be interpreted as, an offer, solicitation, or recommendation to buy or sell or otherwise invest in any of the securities/sectors/countries that may be mentioned. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. “Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.” This article provided by Darcie Guerin, CFP®, First Vice President, Investments & Branch Manager of Raymond James & Associates, Inc. Member New York Stock Exchange/SIPC 606 Bald Eagle Dr. Suite 401, Marco Island, FL 34145. She may be reached at 239389-1041, email Website:



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