Flourish Wealth Management

Market Reflections – Coronavirus Edition

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The Coronavirus has been creating significant disruption to markets, daily routines, and personal safety – but not to your long-term financial plan.

The Dow Jones Industrial Average Index (DJIA) became the first major US Stock Market to reach “Bear Market” levels today (3/11/2020) by dropping over 20% from its all-time high set in mid-February. Stock markets around the world have been reacting violently to concerns related to the spread of Coronavirus along with uncertainty about the impact on the economy, unknown timing about when the crisis will end, and the serious health risk.

Our primary concern during a crisis is for the physical, emotional, and financial safety of our clients. An important part of our wealth management relationship is to be available to hear client concerns about market events like we are experiencing right now, provide a historical perspective to put the significant daily market moves into the appropriate context, while also proactively communicating what Flourish Wealth Management is doing on your behalf.

It is critical to understand that market corrections (down 10%), Bear Markets (down 20%), and economic recessions (at least two consecutive quarters of negative growth) are included in our investment and financial planning assumptions. Many of our clients have seen Monte Carlo demonstrations about how their financial plan will fare in a wide variety of circumstances, covering over 1,000 tests based on historical data, including bear markets. With a successful financial plan, the current scenario is included (although it’s a lot less painful watching the squiggly lines on a presentation screen than personally experiencing the emotional ups and downs). In addition, for clients who rely on cash flows from their portfolio to support their lifestyle, please remember that your next several years of cash needs are covered regardless of what’s happening in the Stock Market.

Unfortunately, we don’t have a crystal ball to know when the markets will recover from the current uncertainty. Market evidence demonstrates the importance of staying fully invested during a downturn. First of all, it is impossible to pick a market top or bottom, plus missing just a few big market “up days” like yesterday dramatically reduces the opportunity for strong long-term performance. The Federal Reserve and other Central Banks have been working proactively to support the markets, efforts which we expect to continue and be augmented by Government initiatives. Finally, the economic impact of disrupted global supply chains has yet to be fully understood and will only become clear as we get more information over the next few months.

Flourish is Prepared

Your team at Flourish is fully prepared for a wide variety of scenarios that could impact our employees, our offices, and our services to clients. We conduct multiple “work from home” tests on an annual basis as part of our culture of compliance to ensure that we can support our clients regardless of whether or not we have access to our physical office. A few important aspects of our crisis planning:

  • · Our entire team has the technical resources and support to work from home without disruption if we need to close our physical office.
  • · We use Zoom for virtual meetings which allow us to continue supporting client meetings remotely.
  • · Clients can also elect to use a Zoom meeting at any time if they would prefer to not visit our office in-person, whether for health or logistics reasons. Just let us know if that is your preference and we will get it set up in advance.

Your team at Flourish Wealth Management is 100% prepared for any contingency to ensure that we can support our client’s needs. We have stress-tested our investment strategies and financial plans to include Bear Markets, economic recessions, and periods of high uncertainty. Each of us is available by phone or e-mail to answer any questions about your investments or financial plan, and we are committed to providing ongoing communication as an important part of our relationship. Finally, we wish everybody continued good health and confidence that Flourish has a plan in place to support you.

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Flourish is Ten Years Old!

A decade ago, we embarked on a journey to empower and serve you with values-based financial planning. In 2024, we celebrate our 10th anniversary with immense gratitude for your trust and support. Here’s to many more years of flourishing financially, together!

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