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What Does The Delta Variant Mean For Your Investments?

With the Delta variant of COVID running rampant, how does another looming wave of COVID impact your portfolio? What do potential mask mandates, a rise in cases and slowing vaccination rates mean for the market and the economy?

Let's review what we already know.

The Delta Variant

With the rise of the Delta variant, infection rates are significantly up. Just months ago infection rates were on a downward trend, but all across the country we're seeing the rate of COVID cases rise exponentially. While this variant, and others, are rising, we're also seeing vaccination rates slow. According to the CDC, the U.S is just over 50% fully vaccinated. Experts, like the Cleveland Clinic, believe that we'd need vaccination rates of 70% to 85% of the total population to reach the herd immunity threshold.

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We've been fighting COVID for a long time. The country as a whole is experiencing pandemic fatigue, and we'd like to get back to "normal." There's a simmering sense of unease and frustration, with many companies and government entities mandating vaccinations or masking. Some companies are finding it difficult to find ample employees – and some employees are finding it difficult to find safe employment. Overall, we're seeing higher rates of hospitalizations across the country as well.

With all of this negative news, should we be scared?

Don't Panic

While infection rates are increasing, death rates are not increasing at the same speed per the CDC. This is due to vaccinations, and those who are vaccinated are less likely to be hospitalized than the unvaccinated. The current unemployment rate, while not at pre-pandemic levels, is at 5.4% as of July, which is historically not too shabby. With unemployment decreasing, we're also seeing corporate earnings go up, particularly in industries that were hit hard by the pandemic.

Overall, GDP growth is continuing in recovery, with the first estimate of Q2 2021 GDP growth at 6.5%. Since this is not the first wave of the pandemic, things going forward may seem a bit less scary and frightening, and the future feels a bit more certain – even if we're dealing with COVID. There's a portion of the country that is feeling less afraid of contracting COVID. Stock markets have continued to hit record highs, even throughout the pandemic.

How Delta May Impact the Markets

There's no need to panic when it comes to the markets and the Delta variant. We've been through this before, and we'll get through it again. While the markets hate uncertainty, we can take solace in the fact that we've already lived through this before. On the whole, we came through the other waves with a strong economy. Yes, we had a recession for the first time in a decade, but we made it through and to the other side.

Investments are meant to be for the long term. Growing your wealth takes time, consistency and a level head. Changing your portfolio based on a quick dip in the market – or even an extended downturn – is a recipe for your own disaster. Those who were hurt most in the markets due to the pandemic were those who were short-term investors or emotional investors – neither of which is a great long-term strategy for growing wealth.

How You Can Prepare for Another Wave

Don't let another wave of COVID rattle you. Prepare yourself for whatever may come – both in your investments and in your personal life. There will be growth opportunities for those willing to take them, and there will be winners and losers in the market. If additional waves and variants of COVID continue to wreak havoc on our country, we have to prepare for the industries that might get hit. Airlines and travel could see declines again. We may see spikes in e-commerce as these industries continue to dominate the economy.

The bottom line, is that it is important to stay diversified in your portfolio. Focus on your long-term growth, and overcome unwise investor behavior by skipping out on the daily market news that can trap you in the here-and-now thinking, instead of the future-forward thinking that you need to grow your wealth.

There are undervalued areas within the global markets that we'll continue to see flourish. While this won't come without expected bumps in the road, you'll need to be proactively managing your portfolio to find opportunities. Analyzing data can be complicated and tiresome, and it pays in dividends to have a trusted financial planner handling this for you. Financial planners help you stay calm when markets are tumultuous, so that you can focus on your long-term goals.

Stay the Course

It seems as though COVID is here to stay, at least for the time being. It's better to be prepared and ready to tackle what lies ahead, rather than bury your head in the sand and miss the opportunities heading your way. Any highs or lows in the market are temporary blips in the long-term management of your investments, so stay the course and keep your eyes to the future.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Flare-Up: Fauci Gets Heated As Delta Variant Infections Rise

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Explainer: What Is The Delta Variant Of Coronavirus With K417N Mutation?

(Reuters) - India said on Wednesday it has found around 40 cases of the Delta coronavirus variant carrying a mutation that appears to make it more transmissible, and advised states to increase testing.

Here is what we know about the variant.

WHAT IS DELTA PLUS?

The variant, called "Delta Plus" in India, was first reported in a Public Health England bulletin on June 11.

It is a sub-lineage of the Delta variant first detected in India and has acquired the spike protein mutation called K417N which is also found in the Beta variant first identified in South Africa.

Some scientists worry that the mutation, coupled with other existing features of the Delta variant, could make it more transmissible.

"The mutation K417N has been of interest as it is present in the Beta variant (B.1.351 lineage), which was reported to have immune evasion property," India's health ministry said in a statement.

Shahid Jameel, a top Indian virologist, said the K417N was known to reduce the effectiveness of a cocktail of therapeutic monoclonal antibodies.

WHERE ALL IT HAS BEEN FOUND?

As of June 16, at least 197 cases has been found from 11 countries - Britain (36), Canada (1), India (8), Japan (15), Nepal (3), Poland (9), Portugal (22), Russia (1), Switzerland (18), Turkey (1), the United States (83).

India said on Wednesday around 40 cases of the variant have been observed in the states of Maharashtra, Kerala and Madhya Pradesh, with "no significant increase in prevalence". The earliest case in India is from a sample taken on April 5.

Britain said its first 5 cases were sequenced on April 26 and they were contacts of individuals who had travelled from, or transited through, Nepal and Turkey.

No deaths were reported among the UK and Indian cases.

WHAT ARE THE WORRIES?

Studies are ongoing in India and globally to test the effectiveness of vaccines against this mutation.

"WHO is tracking this variant as part of the Delta variant, as we are doing for other Variants of Concern with additional mutations," the World Health Organization (WHO) said in a statement sent to Reuters.

"For the moment, this variant does not seem to be common, currently accounting for only a small fraction of the Delta sequences ... Delta and other circulating Variants of Concern remain a higher public health risk as they have demonstrated increases in transmission," it said.

But India's health ministry warned that regions where it has been found "may need to enhance their public health response by focusing on surveillance, enhanced testing, quick contact-tracing and priority vaccination."

There are worries Delta Plus would inflict another wave of infections on India after it emerged from the world's worst surge in cases only recently.

"The mutation itself may not lead to a third wave in India - that also depends on COVID-appropriate behaviour, but it could be one of the reasons," said Tarun Bhatnagar, a scientist with the state-run Indian Council for Medical Research.

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