Investment Commentary – May 2021

May 27, 2021

As expected, economic activity boomed in the first few months of 2021. Widespread vaccinations, pent-up consumer demand, and a massive injection of government stimulus brought the economy roaring back to life. GDP jumped 6.4% in the first three months of the year. Aside from the initial reopening surge in the third quarter of last year, this is the best period for GDP since 2003.

Beyond the next 12-18 months, we will likely see economic growth moderate. Within that timeframe, we remain cautiously optimistic. There are, however, two potential near-term risks that investors should be aware of: the impact of rising inflation and the possibility that rampant speculation is building a bubble in the stock market.

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