The Coronavirus has been creating significant disruption to markets, daily routines, and personal safety – but not to your long-term financial plan.
By Jay Pluimer, AIF® CIMA®
Wednesday, 11 March 2020
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.
Volatile Markets and the Ongoing Spread of the Virus are Causing Economic Uncertainty
By Jay Pluimer, AIF® CIMA®
Tuesday, 03 March 2020
Last week saw the worst week on Wall Street since 2008, as the Dow fell into correction likely due to the outbreak and spread of COVID-19, commonly called novel coronavirus. A market correction is a nerve-wracking event for investors, but the current uneasiness in the markets is no cause for panic.
Market Impact
While the spread of COVID-19 is atypical, market correction is not. In fact, it’s an entirely normal process, and not altogether unexpected after experiencing the longest-running bull market on record. There have been 22 market corrections since 1974, and they are aptly named because the market usually “corrects” itself and returns prices to their longer-term trends. While the coronavirus is likely to cause economic impact into at least the second quarter of 2020, historically, Wall Street’s reaction to these types of epidemics has been short-lived, including in the recent past.
By Jay Pluimer, AIF® CIMA®
Wednesday, 19 February 2020
We’ve had an interesting start to the new decade as a variety of key economic, political, and investment questions are working together to create market volatility and investor uncertainty. There are a few questions that come up frequently during client conversations and hopefully we can share the research we’ve conducted to find answers. As evidence-based investors we like to look at historical market information so we can inform our views of the present based on what has happened in the past. History may not necessarily repeat itself, but historical data can provide a helpful perspective.
Learn More About the Sweeping Legislation Designed to Fight America’s Retirement Savings Crisis
By Kathy Longo, CFP®, CAP®, CDFA
Monday, 20 January 2020
In May 2019, the U.S. House of Representatives passed the Setting Every Community Up for Retirement Enhancement Act, commonly called the SECURE Act. Designed to help tackle our country’s growing retirement savings crisis, the far-reaching legislation spent months tied up in the Senate. On December 19, 2019, it passed the Senate with a 71 to 23 majority.
Let’s take a look at a few standout provisions of the legislation and discuss what they could mean for you.
By Jay Pluimer, AIF® CIMA®
Wednesday, 15 January 2020
Investors of all varieties received a generous Holiday gift from the markets in 2019 as almost all markets generated positive returns. US Stocks led the pack once again as the S&P 500 Index earned 31.5%. It was an interesting year where Bonds also performed well, which isn’t always the case. Key drivers of performance in 2019 included support from the Federal Reserve which reversed course by cutting interest rates to support growth in the US along with moderate earnings growth and easing Trade War tensions. The Trade War between the US and China is on a path to resolution, calming a significant theme of uncertainty. International Stocks also performed well, up 21.5%, with optimism that a calmer foreign trade environment should be helpful for foreign companies plus what appears to be a Brexit resolution. Finally, the positive economic and investment landscape led to the first US decade without a recession as we turn the clock forward into the 2020s.
