Broker Check


July 01, 2020

Happy 4th of July everyone! I’m sure I’m not the only one asking what happened to the first six months of 2020, but in the same breath, I don’t think many of us want to go back and rehash the details. So, let’s take stock of a few things and look forward.

  1. We just experienced the fastest drop in market history.
  2. We are probably experiencing the shortest recession on record.
  3. COVID-19 cases are on the rise again.
  4. Equity markets are surging like the number of COVID-19 cases.

We can wrap all this seeming conflicting information up in a presidential election year! If there is one thing that I am absolutely sure of it’s that this is a perfect environment for option, speculation, and fear, which is great for news headlines. The theme for the markets in 2020 is… you guested it, uncertainty and volatility. 

Stocks are not cheap, the pandemic is not over, and the election is months away. For all those out there trying to “figure out” what is going to happen – good luck. Everyone is going to have an opinion and you know what they say about opinions.

This is my ANTI-soundbite response to all those asking, “what do we do if..”  First, you need to understand what phase of your financial life you are in; accumulation, distribution, or transition. If you are in the accumulation phase, you should honestly assess your career security. If you feel you’re on solid ground, don’t flinch, stay focused. If you feel your position is a bit more precarious, having some extra cash never hurt and could help through an unexpected job transition. If you are in the distribution phase of your financial life I will simply say, I hope your financial advisor has helped you implement a “flooring strategy” for your income needs. If they haven’t, I would ask about the possible benefits so you can determine if it should be part of your plan moving forward. Finally, for those thinking about and preparing for retirement, now is a great time to get serious about understanding the real value in having a PLAN. Not just a managed portfolio, a PLAN. They are not the same thing. Event driven market corrections like COVID-19 are systemic risks. Which basically means they impact all parts of the market.  So, traditional asset allocation does NOT insulate you from the problem. 

Having a plan for any endeavor in life can bring clarity and confidence to your actions. Whether in the accumulation, distribution, or transitions stage of your financial life, having a plan can help you stay on course even when the world around you seems to be pulling you in multiple directions.