The Capitalist Investor - Episode 49

As of the day of recording this episode (Thursday, November 5th), we still don’t know who’s won the election. But rather than dwell on the negatives, we want to focus on what we’re thankful for in 2020. What positive things can we focus on in 2020 despite everything that’s happened? In this episode of The Capitalist Investor, we take a step back and focus on the good things that have happened this year. Listen to learn more!

Outline of This Episode

  • [1:00] What are we thankful for?
  • [5:14] The stock market
  • [6:32] The rise of technology
  • [8:00] Capitalism will survive the election
  • [11:09] Active investment management
  • [16:22] Family + health
  • [16:53] Low interest-rates
  • [18:00] Shoutout to listeners!

The stock market + the rise of technology

In the midst of a 100-year flood, the stock market has ended the year positive. It’s unbelievable. Year-to-date, the S&P 500 is up just under 9%. I’m thankful the stock market is doing well. What else? What if the Coronavirus pandemic happened in 1993? We’re thankful for technology where we can continue to do our jobs from home. In 2019, no one was doing a lot of business with new or current clients over Zoom. Now everyone is able to use Zoom. We have technology that we can embrace to get us by—and it may even stay for the long-haul.

Capitalism will survive the election

We aren’t going to MAGA rallies or wearing Donald Trump shirts. This isn’t a conservative show or a Republican show—this is a show about Capitalism. And we are both thankful that capitalism will survive the election. Even with a Biden win, there isn’t a democratic sweep. Because of that, their ability to push a socialist agenda will be difficult. Republicans taking the majority seat in the senate will ensure checks and balances in the system.

Neither party can do whatever they want—they have to answer to the opposing party. In a democratic sweep, the structure of the country would’ve been drastically changed. Whatever happens, there will still be a separation of power.

Active investment management is on the rise

Active management was left for dead a few years ago. But now it’s making a comeback. This whole seismic shift in the economy brought to light the necessity for active management. Why? It allows you to regain control of your portfolio. Your active manager can decrease your risk and improve your returns. There are so many unknowns out there, which is why active management will continue to be important.

When will the travel industry come back? When will there be a COVID vaccine? How do these things impact the economy? Active management allows you to position yourself to not draw down as much when other people are experiencing negative returns during times of volatility.

Active managers can help make sure you’re in the right stocks. The healthcare sector is an example: there were going to be clear winners in the event of a Biden or Trump win (i.e. Big Pharma and managed care companies won’t do well under a Biden presidency). Some pockets will do well no matter who wins.

You have to get the best players in the industry while they’re trading at a reasonable price. But guessing won’t get you anywhere. We want to be in the stocks that will perform the best no matter who wins. You can’t rely on passive management to do that for you.

What else are we thankful for? Listen to the whole episode to learn more!

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Keep Listening to The Capitalist Investor:
Episode 14:
Positioning Your Portfolio During A Recession, Ep #14
Episode 30:
The “New Normal” Investing Playbook, Ep #30
Episode 46:
Red or Blue, These Stocks are Tried and True, Ep #46
Episode 15:
Spending Strategies in a Bear Market, Ep #15
Episode 31:
Handicapping the 2020 Election, Ep #31
Episode 47:
11 Investments in Your Home That Pay Off, Ep #47
Episode 16:
Bull Market or Bear Market? with Nate Fischer, Ep #16
Episode 32:
Why You Need A Financial Backup Plan, Ep #32