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Financial Planning During Coronavirus

Financial Planning During Coronavirus

Markets during Coronavirus

These are very interesting times we are living in, to say the least. The Coronavirus pandemic has upended daily life and economic activity all around the world. It is hard to believe that the Dow Jones Industrial Average was at an all-time high of 29,551 points on Feb. 12, 2020, and now it has sunk to trading below 20,000 points.

This is a very fluid situation with COVID-19 beginning to make its impact on the US, as it already has in China, Japan, Korea, and most devastatingly in Italy. It is important to be cautious during this time and most importantly, to be level-headed and engaged.

As your investment advisors, we take this situation seriously and we are monitoring it very closely. We remain committed to offering you the best advice even in the worst of times. Here are some key points to remember in lieu of COVID-19:

The economy is now being affected by the coronavirus, and the stock market is taking a beating. However, we believe this is a temporary situation. While we may be entering a bear market, we believe it will be a short one (technically it won’t even be considered a bear market unless it remains at 20% less than its latest peak for at least two quarters). Leading world economists agree that once this pandemic is over, the world’s economies will get back to business as usual and the US economy will return to its bullish behavior of the last 11 years.

While we don’t prescribe market-timing as an investing philosophy, we do see now as a prime opportunity for our aggressive investors to buy more shares of stock. We have had several clients increase their market exposures in the last two weeks and we believe it’s a wise decision if you have discretionary assets to invest at this time.

Market volatility of this nature can be scary. We cannot control what happens around us, but we can control how we react. The important thing is to remain level-headed. Selling at the bottom never makes sense. History has shown that the markets always bounce back. Buy low, sell high—that’s our philosophy, not the reverse.

While we cannot control which way the market will go on a given day, we can control how we react on a daily basis. During this time it is most important for you to be safe. Please take necessary precautions to provide for your well-being and health during this time. If you are at-risk or have underlying health conditions, please stay home and do not risk being exposed to the virus. If you would like to contact us, but you do not feel safe meeting in person, we will continue to be available via phone, email, and text. If you have a question, please let us know.

As a firm we are in the middle of tax season. While we have already e-filed most of our clients’ returns, we still have a few left to deliver. We are still meeting in-person with some of our clients to wrap up their taxes, but we are limiting our contact to only necessary meetings.

Every American is being affected by this pandemic, but perhaps no worker is more affected than those in the services industries whose jobs require meeting in groups of more than 10. We encourage you to look out for the economic good of your neighbors in need. This might look like ordering food to go from a locally-owned restaurant, buying a gift card from a local business that you can redeem later in the year, or putting a deposit down for a photographer, event planner, or venue for an undecided time in the future.

The potential government stimulus package has several provisions for small business owners and checks to be written to citizens, but it will be weeks before the checks arrive and perhaps next year before the business owners get the stimulus money in the form of a tax credit. In the meantime, small business owners are burdened with having to pay their employees while production and revenue are completely halted. We encourage you to keep an eye out for those within your circles whom you can help and “do unto them as you would have them do unto you.”

We want to offer our services to the community as a resource to help respond to unplanned circumstances with solid financial advice. If you have a question or need help, please give us a call. We are here to help.

As a financial advisor Daniel is passionate about helping people achieve their dreams and greatest potential in life. He enjoys strong coffee, thick books, and long bike rides in his hometown of Roanoke, VA.

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