Headlines about progress on COVID-19 vaccines come as welcome news as we approach the end of a year defined by the global pandemic. With COVID cases continuing to grow worldwide and weariness setting in, it is reasonable that individuals and markets will react eagerly to the potential for a return to normalcy.
But what is likely to lie beyond the headlines? Your clients are probably wondering the same about their investments as they follow the latest coronavirus news.
Here are six things to keep in mind about COVID vaccines — and some ways that FundVisualizer can help you address questions and concerns from clients about their investments.
- It’s never wise to chase winners based on headlines. Markets may react strongly to the latest vaccine developments — both the good and bad. However, it’s never a wise decision to base investment decisions on headlines. It’s important for clients to recognize that multiple companies are working on vaccines, and all are likely to report findings that may drive market ups and downs. A company or sector that benefits from one day’s news may suffer the next.
- A viable vaccine isn’t likely to be widely available until 2021. Public health experts are on record saying that even if a viable vaccine is identified this year, it is unlikely to be available for wide distribution until the following year. Experts also caution that it may be later next year before the vaccines, along with the continuation of other public health measures, begin making a significant impact.
- Adopting a new vaccine isn’t always smooth. The need for regulatory approvals and time to ramp up wide-scale manufacturing and distribution are among the reasons that it takes time for vaccines to be adopted. There are other factors as well. For starters, vaccines are not typically 100% effective, and it is possible that candidates that are initially seen as promising may not be recommended for the entire population. Second, there will be a limited number of vaccine doses to go around initially, so they will likely be made available to the higher-risk population. Finally, even if all the other challenges are overcome, many people may choose not to take the vaccine.
- A vaccine isn’t an economic cure-all. A vaccine alone won’t be the magic pill that immediately fixes COVID-related economic conditions that have accumulated over the past year. The economy will take time to rebound. While a vaccine is a key part of that equation, it is important to view the economy — and investments — within a broader context.
- Not every sector will recover in the same way. Social distancing orders, changing work patterns, and travel restrictions have all taken their toll on sectors such as travel. Other companies and sectors have prospered as people grow to rely on technologies and services as part of their pandemic lives. As a vaccine begins making consumers feel safe and behaviors change, those affected sectors will once again evolve in new, and perhaps unexpected, ways.
- Stay patient, stay informed. The most important consideration with news about COVID vaccines is to remain patient and stay informed through the continued ups and downs.
FundVisualizer can help you keep clients informed about their investments and provide context for interpreting vaccine-related ups and downs in the markets. Here are a few options for using FundVisualizer:
Answer questions about specific companies in the news by quickly identifying the top 10, 25, or 50 holdings in any investment. You can also drill down to see the top holdings by sector.
Try it in FundVisualizer: If you are registered FundVisualizer user, you can view Top Holdings in a fund, click here for an example.
Sector allocation
Get a top-level view of relative exposure to sectors that might be experiencing ups and downs as behaviors change, including healthcare, technology, and consumer cyclical.
Asset allocation
To help put market changes in context, you can quickly view how assets are allocated across U.S. and non-U.S. equities and bonds, cash, and other investments.
Try it in FundVisualizer: If you are registered FundVisualizer user, you can compare asset allocation. Click here to view a sample. You can add or remove funds by clicking the “Add/Edit” button.
Explore more features of FundVisualizer by visiting our resource library. Or begin using FundVisualizer for free now.