Here are 8 facts for dealing with uncertainty this week.  As we are calling each and every one of our clients, these are the thoughts I’m sharing. They might help ease your concerns, too.

Not only are markets challenging our resolve, but people are disrupted by working from home, and some are feeling isolated as a result of social distancing. While this is an unprecedented time in many ways, focusing on the facts can help relieve pressure.

There are a lot of unanswered questions right now, but one thing for sure is people want to and need to hear from their trusted advisors.

1. This is a health care crisis, not a financial crisis

It is a health care crisis that is having and will continue to have financial and economic implications.  The severity is just not yet fully known but everyone including politicians and scientific experts has opinions.  No one knows.

 

2. Markets don’t like uncertainty 

As more information becomes known, you should see more rational decision making. Generally, I advise clients to stick to the plans they made before this started. If you aren’t a client of Aspyre Wealth Partners®, you might not have a plan, and that can be unsettling. Call us if you would like to have a conversation about getting a plan started. Sometimes you feel better taking action, and starting a financial plan is something you can do right now, and it may settle some of your concerns by simply taking action.

 

3. We believe the markets will recover at some point

It’s uncertain when, but we should all be prepared for this to get worse before it gets better. And I will reiterate what I mentioned above: if you do not have an investment strategy or policy statements that guide your financial investment decisions, we can work with you to get these started. Without a sound investment strategy and policy statements, you increase the risk of making poor decisions.

 

4. Stick to your plan

Now is a time to be disciplined and to execute your plans. I know I’m being redundant, but if you don’t have a financial plan, an investment strategy, and an investment plan, you should consider getting one in place. Here are the basic tenants of plan execution I’m talking about with our clients right now.

  • Cash planning. People who don’t have enough cash on hand can be at risk of making bad financial decisions. We counsel our clients to have at least 2 years of cash on hand. Depending on their situation, it may make sense to have more or less than that, but each client has a cash plan.
  • Rebalancing. Every day we look for the imbalances in our client portfolios and change what needs to be changed.
  • Tax-loss harvesting. When we do have to meet cash needs, we can take those hits and bank the losses against future gains. This benefits our clients by meeting their current needs and saving money in the future.
  • Take advantage of low-interest rates by refinancing or consolidating your debt. Mortgage rates can be lower than they were when you last financed your home or other real estate assets. Some clients are looking to consolidate under better terms, and we are aware of emergency SBA loans in some markets.
  • Don’t act in fear. Uncertainty and volatility can lead people into making decisions that damage their plans and future by focusing on short term versus long term strategy.

 

5. Interest Rate Cuts

The fed is priming the supply side of the economy by reducing interest rates.  There is currently little demand or appetite from businesses or consumers given the current level of short term uncertainty.  It is also important to note that the impact of these cuts may not be felt for 6 to 9 months which could aid the recovery.

 

6. The fed is restarting QE

Their action should help provide stability and liquidity to the bond markets in the short term. QE, or quantitative easing, is known as large scale asset purchasing as a form of monetary policy.

 

7. Pent up demand and stimulus will likely follow

When we see a recovery, pent up demand and stimulus could speed up our economic and financial recovery. This is a time for patience. Listen to your advisors and follow your plan.

 

8. Flatten the curve

Enhanced and proactive social distancing guidance and “burn out” have an unknown impact on this virus and its spread.  Although preemptive measures may extend the virus, hopefully these actions will mute its impact and the spike. The objective is to lessen the risk of death and keep more people healthy. At Aspyre Wealth Partners® we are fiduciaries, of course, and we also care about the health of our clients and our communities.

 

While we have yet to see a final package from congress to support businesses and workers, we hope to see something soon. In the meantime, I encourage you to do what I am encouraging all of our clients and team members to do: limit the amount of time you spend thinking about things we cannot control.

Focus on what you can do right now, and use these suggestions to help keep you in a productive loop.

 

  • If you are in a transition or preparing for one, such as a major purchase or life/job change or a family status change, make sure you have an updated investment policy statement and financial plan. We can help you update your existing plan or help you get one started.
  • Understand your cash needs. Now is a good time to update your family budget and reassess how you are spending and saving money. If you don’t have a budget, think about starting one.
  • Check to make sure your estate plan is up to date. You should check your healthcare directives, specifically. Many legal documents can be updated via email. We can help you get started or help you make decisions on what changes might be appropriate for you today’s environment.
  • If you don’t have a financial advisor or a wealth manager (or if your current situation is not meeting your needs), contact us and set up a meeting with Angela Kreps. She will meet with you to better understand your situation, and then connect you with the right advisor.
  • You don’t have to have millions of dollars lying around to qualify to work with us. We have different plans available to help professionals and executives in multiple situations and various life stages. Contact Angela to get pointed in the right direction.

 

In the spirit of the season, here’s an Irish Blessing:

“As you slide down the banister of life,

May the splinters never point the wrong way.”

 

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